The market reacts to exit polls<o:p></o:p>

Indian stocks rose to new highs on Monday as exit polls suggested Prime Minister Narendra Modi will be elected for a third term, potentially with a large mandate. Investors believe that continued public spending will help to preserve economic momentum.<o:p></o:p>

The broader Nifty index rose as much as 3.59 per cent to a record 23,338.70 points, while the BSE index vaulted 3.76 per cent to a career-high of 76,738.89 points. The Nifty 50 index achieved its highest intra-day rise since February 2021. Bond yields also declined, with the benchmark 10-year government bond yield reaching 6.9421 per cent, its lowest level since April 2022, while the rupee rose to 82.9575, its best level since March.<o:p></o:p>

Exit polls predict a strong mandate<o:p></o:p>

Weekend exit polls indicated that Modi's Bharatiya Janata Party (BJP) and allies could boost their 303 seats in the 543-member lower house, potentially securing a two-thirds majority. This conclusion would outperform experts' estimates and likely assist equities markets, which have already reached record highs due to economic expansion.<o:p></o:p>

"The markets are pricing in the continuation of this government's policies and approach to economic management," said Rajesh Bhatia, Chief Investment Officer of ITI Mutual Fund. He expects the government to continue focusing on significant capital expenditures and production-linked incentives to sustain growth.<o:p></o:p>

Economic growth and investor sentiment<o:p></o:p>

India's economic growth rose to 8.2 per cent in the fiscal year ending March 2024, driven by government infrastructure investment and a real estate boom. Analysts believe that a big Modi victory will provide the political capital required for other changes, like land and labour reforms.<o:p></o:p>

Citi analysts said that a verified Modi victory would be viewed as a vote for continuity, which would benefit stocks in infrastructure, logistics, and manufacturing. Companies including Adani Ports, Larsen &amp; Toubro, and Bharat Electronics are expected to benefit.<o:p></o:p>

Investors also expect further efforts to build India as a manufacturing powerhouse, drawing global companies such as Apple and Tesla to diversify their production beyond China.<o:p></o:p>

Foreign investment outlook<o:p></o:p>

Foreign investors, who invested a net $20.7 billion in Indian shares last year but withdrew assets ahead of the election, may return after the vote. Goldman Sachs analysts discovered that clients believe political continuity will contribute to a stable macroeconomic environment and continuous changes.<o:p></o:p>

Exit polls in India have historically been inaccurate, but official election results, which will be published on Tuesday, will validate the verdict. If the BJP wins easily, Swastika Investments Managing Director Sunil Nyati predicts a sustained market surge, particularly in large-cap companies, as foreign investors resume buying Indian equities.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The market reacts to exit polls Indian stocks rose to new highs on Monday as exit polls suggested Prime Minister Narendra Modi will be elected for a third term, potentially with a large mandate.

The market reacts to exit polls Indian stocks rose to new highs on Monday as exit polls suggested Prime Minister Narendra Modi will be elected for a third term, potentially with a large mandate. Investors believe that continued public spending will help to preserve economic momentum. The broader Nifty index rose as much as 3.59 per cent to a record 23,338.70 points, while the BSE index vaulted 3.76 per cent to a career-high of 76,738.89 points. The Nifty 50 index achieved its highest intra-day rise since February 2021. Bond yields also declined, with the benchmark 10-year government bond yield reaching 6.9421 per cent, its lowest level since April 2022, while the rupee rose to 82.9575, its best level since March. Exit polls predict a strong mandate Weekend exit polls indicated that Modi's Bharatiya Janata Party (BJP) and allies could boost their 303 seats in the 543-member lower house, potentially securing a two-thirds majority. This conclusion would outperform experts' estimates and likely assist equities markets, which have already reached record highs due to economic expansion. "The markets are pricing in the continuation of this government's policies and approach to economic management," said Rajesh Bhatia, Chief Investment Officer of ITI Mutual Fund. He expects the government to continue focusing on significant capital expenditures and production-linked incentives to sustain growth. Economic growth and investor sentiment India's economic growth rose to 8.2 per cent in the fiscal year ending March 2024, driven by government infrastructure investment and a real estate boom. Analysts believe that a big Modi victory will provide the political capital required for other changes, like land and labour reforms. Citi analysts said that a verified Modi victory would be viewed as a vote for continuity, which would benefit stocks in infrastructure, logistics, and manufacturing. Companies including Adani Ports, Larsen & Toubro, and Bharat Electronics are expected to benefit. Investors also expect further efforts to build India as a manufacturing powerhouse, drawing global companies such as Apple and Tesla to diversify their production beyond China. Foreign investment outlook Foreign investors, who invested a net $20.7 billion in Indian shares last year but withdrew assets ahead of the election, may return after the vote. Goldman Sachs analysts discovered that clients believe political continuity will contribute to a stable macroeconomic environment and continuous changes. Exit polls in India have historically been inaccurate, but official election results, which will be published on Tuesday, will validate the verdict. If the BJP wins easily, Swastika Investments Managing Director Sunil Nyati predicts a sustained market surge, particularly in large-cap companies, as foreign investors resume buying Indian equities. (With inputs from Reuters)

Indian shares surge on exit polls predicting Modi's third term

Now, we turn our attention to Indian markets after exit polls show a resounding victory for the ruling party. Benchmark stock indices opened strongly, with new highs in sight.

India's stock rally hinges on Modi bettering 303-seat tally

In the last few years, India’s policy community has been divided into three groups, with the first arguing for an East Asia-like development led by manufacturing, supported and subsidised by the state through industrial and trade policy. The second group, to which non-resident Indian economists especially subscribe, is that India should pursue a novel approach to services-led development given its inherent strength in the sector and limitations in manufacturing due to democracy. The third group, which comes not from the cohort of economists but mostly from industry leaders, is that given its size, the scale of the domestic market, and fertile land (India has the world’s largest arable land), it should try all three - agriculture, industry, and services.

The previous phase of globalisation rested on four pillars of free movement of goods, services, capital, and people. The developing countries benefitted enormously by offering cheaper goods, services, and labour and getting capital. The East Asian countries, and most notably China, built unprecedented dominance in manufacturing, accounting for around one-third of the global share while consuming just one-tenth of it. The supremacy in manufacturing resulted in a considerable merchandise trade surplus and jobs for its billion-plus people.

China’s experience is not unique among the East Asian countries. All the East Asian countries like Japan, Taiwan, and South Korea built a competitive edge in manufacturing through the smart use of industrial policy, which protected the domestic markets while propping up national champions that tried to capture the global market.

Japan was the leader and the first to adopt this model, while its followers tweaked it to fit their needs and the prevailing global environment. The model adopted by these countries has delivered results so similar that today, Japan, South Korea, and Taiwan have almost similar per capita income at market rates. And all these countries run huge goods trade surpluses with the rest of the world.

On the other hand, India built an edge in services and labour exports, although not on the scale of China. The huge merchandise success story of China masks its competitiveness in services, where it is 4th largest exporter in the world after the US, UK, and Germany, while India is ranked 6th after China and Ireland.

China and India doubled their share of global commercial services exports from 2005 to 2022, from 3.0 per cent to 5.4 per cent, and from 2.0 per cent to 4.6 per cent, respectively. The global goods export list is headed by China, with USD 3.6 trillion or 14 per cent of total exports against India’s 1.8 per cent. The country has been the largest exporter of goods in the world since 2009.

Also read:&nbsp;<a data-ved="2ahUKEwjazdKau5eGAxUozzgGHcsGCt8QxfQBKAB6BAgLEAE" href="https://www.wionews.com/business-economy/data-lab-are-chinas-women-turbocharging-the-economy-can-india-keep-up-629435" jsname="YKoRaf" ping="/url?sa=t&amp;source=web&amp;rct=j&amp;opi=89978449&amp;url=https://www.wionews.com/business-economy/data-lab-are-chinas-women-turbocharging-the-economy-can-india-keep-up-629435&amp;ved=2ahUKEwjazdKau5eGAxUozzgGHcsGCt8QxfQBKAB6BAgLEAE">Data Lab | Are China`s women turbocharging its economy? Can India catch up?</a>

In terms of net secondary income, which consists mainly of remittances, India is five times ahead of China at USD 97 billion. On the net primary income, which is the return on FDI and FPI, China transfers almost 4.5 times to the investor nations. The reason behind the high outgo from China is that the country attracted many times more FDI and FPI than India or any other developing country in the last four decades.

The combined value of services exports and net secondary income (read remittances) is around USD 438 billion, the third highest in the world after the United States and the United Kingdom. On the other hand, the combined value of services exports and net secondary income for China would be around USD 401 billion.

In the four pillars of current account balance, India beats China in labour and outgo on capital investment but needs to catch up on goods and services exports. In terms of services, India is close to China, but in terms of goods, Beijing has built an advantage of almost eight times, and that gap will not be bridged easily.
<img alt="Economy" data-align="center" data-entity-type="file" data-entity-uuid="87f1b9d5-7839-4e13-bd7a-e28009d65732" src="//cdn.wionews.com/sites/default/files/inline-images/Capture_65.JPG" />
India and China Current Account Balance Data<a href="#_ftn1" name="_ftnref1" title="">[1]</a>/World Bank (Figures in USD)

<div>
<div id="ftn1">
<a href="#_ftnref1" name="_ftn1" title="">[1]</a> 2022/23, whichever is available for the metric because there is not much difference, either in data or to the macroeconomic argument
</div>
</div>

India may never be able to build a merchandise trade surplus of USD 800 -900 billion, which China ran with the rest of the world. India’s services exports have not even crossed a 5 per cent share in the global services market, while China reached around 2023. Even if India doubles its share to get 10 per cent of global services exports and 4 per cent of global exports by 2030, that would put the country in a respectable position. India should aim to capture at least 5 per cent of international trade by 2030 from its current share of around 2.2 per cent.
<img alt="Economy" data-align="center" data-entity-type="file" data-entity-uuid="3179b6fd-1c87-43f4-b657-daa588ecbbd0" src="//cdn.wionews.com/sites/default/files/inline-images/Capture_66.JPG" />
In 2022, merchandise exports accounted for around 73 per cent of global trade, while services accounted for just 27 per cent. Though the composition is changing with increasing tariffs and non-tariff barriers, for services to reach the level of goods will take at least more than a decade. Overall, the value of global trade fell by 3 per cent in 2023. It dropped by 5 per cent for trade in goods but grew by 8 per cent for trade in services.

Even more soothing data point is that India's services exports jumped 11.4 per cent to USD 345 billion in 2023 despite global economic uncertainties, while China's shipments from the sector contracted by 10.1 per cent to USD 381 billion, according to a UNCTAD report.

However, even after these soothing developments, one must recognise that none of the top 10 trading nations have a service export share more than goods exports. The United Kingdom comes closest to it with a 49 per cent services share in total exports, and India is its nearest competitor with a 40 per cent share of services in total exports.

Also read:&nbsp;<a data-ved="2ahUKEwjazdKau5eGAxUozzgGHcsGCt8QxfQBKAB6BAgHEAE" href="https://www.wionews.com/business-economy/china-overtakes-us-as-indias-top-trading-partner-in-fy24-data-shows-720883" jsname="YKoRaf" ping="/url?sa=t&amp;source=web&amp;rct=j&amp;opi=89978449&amp;url=https://www.wionews.com/business-economy/china-overtakes-us-as-indias-top-trading-partner-in-fy24-data-shows-720883&amp;ved=2ahUKEwjazdKau5eGAxUozzgGHcsGCt8QxfQBKAB6BAgHEAE">China overtakes US as India`s top trading partner in FY24, data shows</a>

The East Asian economies are skewed toward merchandise, with 90 per cent for China, 84 per cent for South Korea, and 81 per cent for Japan, while the UK (51 per cent), India (60 per cent), and the US (69 per cent) are at the other end of the spectrum. India needs nearly double-digit growth for around two decades to become a developed country, and for that, the economy must fire all three engines.

The debate on goods vs. services is unnecessary, and India must spend time and effort on something other than this luxury. The country's policymakers must make a sustained effort to increase the merchandise (including agricultural produce) and services to achieve the goal of a developed nation by 2047.

(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.)

In the last few years, India’s policy community has been divided into three groups, with the first arguing for an East Asia-like development led by manufacturing, supported and subsidised by the state through industrial and trade policy.

In the last few years, India’s policy community has been divided into three groups, with the first arguing for an East Asia-like development led by manufacturing, supported and subsidised by the state through industrial and trade policy. The second group, to which non-resident Indian economists especially subscribe, is that India should pursue a novel approach to services-led development given its inherent strength in the sector and limitations in manufacturing due to democracy. The third group, which comes not from the cohort of economists but mostly from industry leaders, is that given its size, the scale of the domestic market, and fertile land (India has the world’s largest arable land), it should try all three - agriculture, industry, and services. The previous phase of globalisation rested on four pillars of free movement of goods, services, capital, and people. The developing countries benefitted enormously by offering cheaper goods, services, and labour and getting capital. The East Asian countries, and most notably China, built unprecedented dominance in manufacturing, accounting for around one-third of the global share while consuming just one-tenth of it. The supremacy in manufacturing resulted in a considerable merchandise trade surplus and jobs for its billion-plus people. China’s experience is not unique among the East Asian countries. All the East Asian countries like Japan, Taiwan, and South Korea built a competitive edge in manufacturing through the smart use of industrial policy, which protected the domestic markets while propping up national champions that tried to capture the global market. Japan was the leader and the first to adopt this model, while its followers tweaked it to fit their needs and the prevailing global environment. The model adopted by these countries has delivered results so similar that today, Japan, South Korea, and Taiwan have almost similar per capita income at market rates. And all these countries run huge goods trade surpluses with the rest of the world. On the other hand, India built an edge in services and labour exports, although not on the scale of China. The huge merchandise success story of China masks its competitiveness in services, where it is 4th largest exporter in the world after the US, UK, and Germany, while India is ranked 6th after China and Ireland. China and India doubled their share of global commercial services exports from 2005 to 2022, from 3.0 per cent to 5.4 per cent, and from 2.0 per cent to 4.6 per cent, respectively. The global goods export list is headed by China, with USD 3.6 trillion or 14 per cent of total exports against India’s 1.8 per cent. The country has been the largest exporter of goods in the world since 2009. Also read: Data Lab | Are China`s women turbocharging its economy? Can India catch up? In terms of net secondary income, which consists mainly of remittances, India is five times ahead of China at USD 97 billion. On the net primary income, which is the return on FDI and FPI, China transfers almost 4.5 times to the investor nations. The reason behind the high outgo from China is that the country attracted many times more FDI and FPI than India or any other developing country in the last four decades. The combined value of services exports and net secondary income (read remittances) is around USD 438 billion, the third highest in the world after the United States and the United Kingdom. On the other hand, the combined value of services exports and net secondary income for China would be around USD 401 billion. In the four pillars of current account balance, India beats China in labour and outgo on capital investment but needs to catch up on goods and services exports. In terms of services, India is close to China, but in terms of goods, Beijing has built an advantage of almost eight times, and that gap will not be bridged easily. India and China Current Account Balance Data[1]/World Bank (Figures in USD) [1] 2022/23, whichever is available for the metric because there is not much difference, either in data or to the macroeconomic argument India may never be able to build a merchandise trade surplus of USD 800 -900 billion, which China ran with the rest of the world. India’s services exports have not even crossed a 5 per cent share in the global services market, while China reached around 2023. Even if India doubles its share to get 10 per cent of global services exports and 4 per cent of global exports by 2030, that would put the country in a respectable position. India should aim to capture at least 5 per cent of international trade by 2030 from its current share of around 2.2 per cent. In 2022, merchandise exports accounted for around 73 per cent of global trade, while services accounted for just 27 per cent. Though the composition is changing with increasing tariffs and non-tariff barriers, for services to reach the level of goods will take at least more than a decade. Overall, the value of global trade fell by 3 per cent in 2023. It dropped by 5 per cent for trade in goods but grew by 8 per cent for trade in services. Even more soothing data point is that India's services exports jumped 11.4 per cent to USD 345 billion in 2023 despite global economic uncertainties, while China's shipments from the sector contracted by 10.1 per cent to USD 381 billion, according to a UNCTAD report. However, even after these soothing developments, one must recognise that none of the top 10 trading nations have a service export share more than goods exports. The United Kingdom comes closest to it with a 49 per cent services share in total exports, and India is its nearest competitor with a 40 per cent share of services in total exports. Also read: China overtakes US as India`s top trading partner in FY24, data shows The East Asian economies are skewed toward merchandise, with 90 per cent for China, 84 per cent for South Korea, and 81 per cent for Japan, while the UK (51 per cent), India (60 per cent), and the US (69 per cent) are at the other end of the spectrum. India needs nearly double-digit growth for around two decades to become a developed country, and for that, the economy must fire all three engines. The debate on goods vs. services is unnecessary, and India must spend time and effort on something other than this luxury. The country's policymakers must make a sustained effort to increase the merchandise (including agricultural produce) and services to achieve the goal of a developed nation by 2047. (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.)

What India can learn from China on manufacturing vs services-led growth debate

As India heads to polls, the economic situation of households becomes important to understand for policymakers. Are indian households happy with their economic situation? Are there areas that the successive government needs to focus on? That's what this report decodes...

Are Indian households happy with the economy?

In a recent report by the Reserve Bank of India (RBI), the country's economic prospects have been painted with a bright hue, forecasting sustained GDP growth of 8 per cent. <o:p></o:p>

Despite a global economic slowdown and geopolitical tensions, the RBI remains optimistic about India's macroeconomic stability, pointing towards a conducive environment for growth. <o:p></o:p>

Here are the key insights provided by the RBI's bulletin, highlighting the factors driving India's economic momentum. <o:p></o:p>

Stellar growth prospects amid global slowdown<o:p></o:p>

The RBI's monthly bulletin highlighted India's resilience in the face of a sluggish global economy. <o:p></o:p>

While major economies grapple with dwindling growth rates, India stands firm, with its GDP averaging above 8 per cent from FY21 to FY24. <o:p></o:p>

The bulletin noted the sustainability of this growth trajectory, citing strong demand visibility and favourable macroeconomic indicators. <o:p></o:p>

Despite global headwinds, India's economic fundamentals remain strong, fostering an environment conducive to further expansion.<o:p></o:p>

Consumer demand dynamics<o:p></o:p>

A notable aspect highlighted by the RBI is the evolving landscape of consumer demand within India. <o:p></o:p>

While the domestic Fast-Moving Consumer Goods (FMCG) sector may witness a moderation in the coming months, the demand outlook for premium consumer businesses appears resilient. <o:p></o:p>

The central bank attributes this shift to significant per capita income changes underway in the country. <o:p></o:p>

Moreover, despite the festive season, private final consumption expenditure remains subdued, signalling nuanced patterns in consumer behaviour. <o:p></o:p>

Challenges amidst opportunities<o:p></o:p>

Amidst the promising growth outlook, the RBI acknowledged prevailing challenges and contrasts on both domestic and global fronts. <o:p></o:p>

While capacity utilisation levels across sectors reach a threshold necessitating fresh investments, geopolitical tensions and stubborn inflation abroad pose risks to global growth momentum. <o:p></o:p>

However, despite external uncertainties, India benefits from a favourable macroeconomic configuration, serving as a catalyst for sustained growth. <o:p></o:p>

The central bank reinstated the importance of leveraging this environment to strengthen infrastructure, manufacturing, and technological prowess, thereby transforming challenges into opportunities for long-term prosperity.

<o:p></o:p>

Inflation and policy implications<o:p></o:p>

Addressing inflation dynamics, the RBI notes a steady decline in core inflation, which, if not for intermittent food price pressures, would have hastened headline inflation towards the targeted 4 per cent. <o:p></o:p>

This observation underscores the intricacies of inflation management amidst fluctuating commodity prices.<o:p></o:p>

As the central bank navigates these nuances, it emphasises the need for prudent policy measures to ensure stable economic growth while mitigating inflationary risks. <o:p></o:p>

<o:p></o:p>

In a recent report by the Reserve Bank of India (RBI), the country's economic prospects have been painted with a bright hue, forecasting sustained GDP growth of 8 per cent.

In a recent report by the Reserve Bank of India (RBI), the country's economic prospects have been painted with a bright hue, forecasting sustained GDP growth of 8 per cent. Despite a global economic slowdown and geopolitical tensions, the RBI remains optimistic about India's macroeconomic stability, pointing towards a conducive environment for growth. Here are the key insights provided by the RBI's bulletin, highlighting the factors driving India's economic momentum. Stellar growth prospects amid global slowdown The RBI's monthly bulletin highlighted India's resilience in the face of a sluggish global economy. While major economies grapple with dwindling growth rates, India stands firm, with its GDP averaging above 8 per cent from FY21 to FY24. The bulletin noted the sustainability of this growth trajectory, citing strong demand visibility and favourable macroeconomic indicators. Despite global headwinds, India's economic fundamentals remain strong, fostering an environment conducive to further expansion. Consumer demand dynamics A notable aspect highlighted by the RBI is the evolving landscape of consumer demand within India. While the domestic Fast-Moving Consumer Goods (FMCG) sector may witness a moderation in the coming months, the demand outlook for premium consumer businesses appears resilient. The central bank attributes this shift to significant per capita income changes underway in the country. Moreover, despite the festive season, private final consumption expenditure remains subdued, signalling nuanced patterns in consumer behaviour. Challenges amidst opportunities Amidst the promising growth outlook, the RBI acknowledged prevailing challenges and contrasts on both domestic and global fronts. While capacity utilisation levels across sectors reach a threshold necessitating fresh investments, geopolitical tensions and stubborn inflation abroad pose risks to global growth momentum. However, despite external uncertainties, India benefits from a favourable macroeconomic configuration, serving as a catalyst for sustained growth. The central bank reinstated the importance of leveraging this environment to strengthen infrastructure, manufacturing, and technological prowess, thereby transforming challenges into opportunities for long-term prosperity. Inflation and policy implications Addressing inflation dynamics, the RBI notes a steady decline in core inflation, which, if not for intermittent food price pressures, would have hastened headline inflation towards the targeted 4 per cent. This observation underscores the intricacies of inflation management amidst fluctuating commodity prices. As the central bank navigates these nuances, it emphasises the need for prudent policy measures to ensure stable economic growth while mitigating inflationary risks.

RBI foresees 8 pc growth amid global slowdown, signals shifts in consumer demand

Echoing the vibrancy of India's economic boom during the mid-2000s, a recent report by Morgan Stanley highlights striking parallels between then and now, attributing the current surge to a strong investment trajectory. <o:p></o:p>

Economists at Morgan Stanley highlight the resemblance between India's current growth cycle and the period from 2003 to 2007, characterised by an investment-driven expansion that propelled the economy to impressive heights.<o:p></o:p>

The report indicates the vital role of investment as a primary driver of India's economic resurgence, mirroring the trajectory witnessed during the mid-2000s. <o:p></o:p>

Notably, India's gross fixed capital formation has surged, signalling a sustained upswing in investment activity after a decade-long decline. <o:p></o:p>

The investment ratio, which plummeted to 28 per cent in 2021, is projected to climb to 36 per cent by 2027, indicating the buoyancy of India's economic landscape.<o:p></o:p>

According to Bloomberg, Morgan Stanley economists project a promising trajectory for India's investment cycle, brought by the prospects of robust capital expenditure, burgeoning exports, and enhanced macroeconomic stability. <o:p></o:p>

Despite concerns about sustainability, the report posits that India's current growth trajectory exhibits resilience, with ample scope for further expansion driven by private sector participation and rising exports. <o:p></o:p>

India's status as the world's fastest-growing major economy is strengthened by its investment-led growth narrative, as highlighted by top economic advisers. <o:p></o:p>

Anticipating sustained capital formation, economists foresee India's economy expanding by over 7 per cent in the fiscal year commencing in April, fostering optimism amidst evolving global economic dynamics.<o:p></o:p>

The surge in investment activity has not only bolstered economic fundamentals but has also catalysed significant market movements. <o:p></o:p>

Key indices such as the S&amp;P BSE Industrials Index have witnessed substantial gains, reflecting investor confidence in India's burgeoning industrial landscape.<o:p></o:p>

Amidst growing investor optimism, the collective market value of industrial players has surged, signalling robust growth prospects in key sectors.<o:p></o:p>

While India's current economic trajectory bears semblance to the resplendent growth witnessed in the mid-2000s, analysts have also issued caution against potential impediments that could impede the growth momentum. <o:p></o:p>

Labour shortages and logistical bottlenecks pose challenges to sustaining the growth cycle, warranting proactive measures to address emerging constraints. <o:p></o:p>

Nonetheless, Morgan Stanley remains optimistic about India's macroeconomic outlook, citing the enduring resilience of the investment-driven growth model.<o:p></o:p>

(With inputs from Bloomberg)<o:p></o:p>

Echoing the vibrancy of India's economic boom during the mid-2000s, a recent report by Morgan Stanley highlights striking parallels between then and now, attributing the current surge to a strong investment trajectory.

Echoing the vibrancy of India's economic boom during the mid-2000s, a recent report by Morgan Stanley highlights striking parallels between then and now, attributing the current surge to a strong investment trajectory. Economists at Morgan Stanley highlight the resemblance between India's current growth cycle and the period from 2003 to 2007, characterised by an investment-driven expansion that propelled the economy to impressive heights. The report indicates the vital role of investment as a primary driver of India's economic resurgence, mirroring the trajectory witnessed during the mid-2000s. Notably, India's gross fixed capital formation has surged, signalling a sustained upswing in investment activity after a decade-long decline. The investment ratio, which plummeted to 28 per cent in 2021, is projected to climb to 36 per cent by 2027, indicating the buoyancy of India's economic landscape. According to Bloomberg, Morgan Stanley economists project a promising trajectory for India's investment cycle, brought by the prospects of robust capital expenditure, burgeoning exports, and enhanced macroeconomic stability. Despite concerns about sustainability, the report posits that India's current growth trajectory exhibits resilience, with ample scope for further expansion driven by private sector participation and rising exports. India's status as the world's fastest-growing major economy is strengthened by its investment-led growth narrative, as highlighted by top economic advisers. Anticipating sustained capital formation, economists foresee India's economy expanding by over 7 per cent in the fiscal year commencing in April, fostering optimism amidst evolving global economic dynamics. The surge in investment activity has not only bolstered economic fundamentals but has also catalysed significant market movements. Key indices such as the S&P BSE Industrials Index have witnessed substantial gains, reflecting investor confidence in India's burgeoning industrial landscape. Amidst growing investor optimism, the collective market value of industrial players has surged, signalling robust growth prospects in key sectors. While India's current economic trajectory bears semblance to the resplendent growth witnessed in the mid-2000s, analysts have also issued caution against potential impediments that could impede the growth momentum. Labour shortages and logistical bottlenecks pose challenges to sustaining the growth cycle, warranting proactive measures to address emerging constraints. Nonetheless, Morgan Stanley remains optimistic about India's macroeconomic outlook, citing the enduring resilience of the investment-driven growth model. (With inputs from Bloomberg)

India's economic surge echoes mid-2000s boom, says Morgan Stanley report

As Prime Minister Narendra Modi seeks to make India the chipmaker for the world, the Indian government&nbsp;on Thursday (Feb 29) approved the construction of three semiconductor plants worth $15.2 billion by companies including Tata Group and CG Power. 
 
Chips, or semiconductors, are at the heart of a new kind of competition between major players, with China and US pitted against each other in what's called 'chip wars'.

The announcement by the Indian Minister of Electronics and Information Technology Ashwini Vaishnaw comes as the country has sought to become an electronics powerhouse.&nbsp;

<h2>‘A big decision’</h2>

Indian Prime Minister Narendra Modi’s cabinet green-lit several proposals which also include Tata Group’s plan to build an $11 billion site which will be the country’s first major chipmaking facility.&nbsp;

New Delhi expects its semiconductor market to be worth $63 billion by 2026 but has faced some setbacks in the past and also does not have a chipmaking facility, yet.

“This is a big decision for the country and a key accomplishment towards making India a self-dependent country,” Vaishnaw told reporters on Thursday. He also said that the construction of these plants will begin within the next 100 days.&nbsp;

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/indias-gdp-grew-84-in-q3-economy-expected-to-grow-76-this-year-695260">India's GDP grew 8.4% in Q3; economy expected to grow 7.6% this year</a>

These factories will reportedly manufacture and package chips for sectors including defence, automobiles and telecommunication.

<h2>About the proposals</h2>

The government also cleared Tata Group’s separate proposal for a chip assembly plant which will reportedly cost over $3 billion as well as a packaging venture between Japan’s Renesas Electronics Corp and the Murugappa Group’s CG Power.&nbsp;

Tata Group will partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp for its project of building India’s first chipmaking plant.&nbsp;

The new facility will produce so-called mature chips – which use 40-nanometer or older technology – typically used in consumer electronics, automobiles, defence systems and aircraft, reported Bloomberg.&nbsp;

“This fab (semiconductor fabrication facility) will have manufacturing capacity of up to 50,000 wafers per month and will include next generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency,” the Tata Group said in a statement.

The new semiconductor fab will be built in the Indian town of Dholera in Gujarat, according to the Tata Group and will create over 20,000 direct and indirect skilled jobs in the region.&nbsp;

Also Read |&nbsp;<a href="https://www.wionews.com/trending/bill-gates-meets-pm-modi-in-india-talks-about-ai-for-public-good-and-innovation-695326">Bill Gates meets PM Modi in India, talks about AI for 'public good' and 'innovation'</a>

CG Power will partner with Japan’s Renesas Electronics Corp and Thailand-based Stars Microelectronics for a $91.6 million chip packaging plant, also in the Indian state of Gujarat.&nbsp;

According to the Indian minister, a third chip packaging plant worth $3.3 billion will be set up in the north-eastern state of Assam by Tata unit Tata Semiconductor Assembly and Test Pvt Ltd.&nbsp;

Semiconductors have been making headlines, particularly since the so-called chip war between the United States and China amid geopolitical tensions which has prompted other countries to ramp up development domestic capabilities, including India.

(With inputs from agencies) 
&nbsp;

As Prime Minister Narendra Modi seeks to make India the chipmaker for the world, the Indian government on Thursday (Feb 29) approved the construction of three semiconductor plants worth $15.

As Prime Minister Narendra Modi seeks to make India the chipmaker for the world, the Indian government on Thursday (Feb 29) approved the construction of three semiconductor plants worth $15.2 billion by companies including Tata Group and CG Power. Chips, or semiconductors, are at the heart of a new kind of competition between major players, with China and US pitted against each other in what's called 'chip wars'. The announcement by the Indian Minister of Electronics and Information Technology Ashwini Vaishnaw comes as the country has sought to become an electronics powerhouse. ‘A big decision’ Indian Prime Minister Narendra Modi’s cabinet green-lit several proposals which also include Tata Group’s plan to build an $11 billion site which will be the country’s first major chipmaking facility. New Delhi expects its semiconductor market to be worth $63 billion by 2026 but has faced some setbacks in the past and also does not have a chipmaking facility, yet. “This is a big decision for the country and a key accomplishment towards making India a self-dependent country,” Vaishnaw told reporters on Thursday. He also said that the construction of these plants will begin within the next 100 days. Also Read | India's GDP grew 8.4% in Q3; economy expected to grow 7.6% this year These factories will reportedly manufacture and package chips for sectors including defence, automobiles and telecommunication. About the proposals The government also cleared Tata Group’s separate proposal for a chip assembly plant which will reportedly cost over $3 billion as well as a packaging venture between Japan’s Renesas Electronics Corp and the Murugappa Group’s CG Power. Tata Group will partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp for its project of building India’s first chipmaking plant. The new facility will produce so-called mature chips – which use 40-nanometer or older technology – typically used in consumer electronics, automobiles, defence systems and aircraft, reported Bloomberg. “This fab (semiconductor fabrication facility) will have manufacturing capacity of up to 50,000 wafers per month and will include next generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency,” the Tata Group said in a statement. The new semiconductor fab will be built in the Indian town of Dholera in Gujarat, according to the Tata Group and will create over 20,000 direct and indirect skilled jobs in the region. Also Read | Bill Gates meets PM Modi in India, talks about AI for 'public good' and 'innovation' CG Power will partner with Japan’s Renesas Electronics Corp and Thailand-based Stars Microelectronics for a $91.6 million chip packaging plant, also in the Indian state of Gujarat. According to the Indian minister, a third chip packaging plant worth $3.3 billion will be set up in the north-eastern state of Assam by Tata unit Tata Semiconductor Assembly and Test Pvt Ltd. Semiconductors have been making headlines, particularly since the so-called chip war between the United States and China amid geopolitical tensions which has prompted other countries to ramp up development domestic capabilities, including India. (With inputs from agencies)

India as chipmaker for world: Govt approves semiconductor plant investments worth $15bn

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29)&nbsp;marking the fastest pace with which the economy grew in one-and-half years, beating all estimates.&nbsp;

<h2>India’s economic growth beats estimates</h2>

The economic growth reported for the third quarter was much higher than the estimated 6.6 per cent by economists, according to a&nbsp;Reuters poll.

It was also higher than the revised growth of 8.1 per cent in the previous quarter which stood at 7.6 per cent in the three months ending September 30.&nbsp;

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/decoding-the-modi-governments-white-paper-on-indian-economy-688601">Decoding the Modi government's white paper on Indian economy</a>

This growth has been attributed to strong manufacturing and construction activity in India.&nbsp;

Prime Minister Narendra Modi’s government has raised spending on infrastructure and incentivised manufacturing of phones, electronics, drones and semiconductors.&nbsp;

Manufacturing, over the past decade, has accounted for 17 per cent of India’s economy and expanded 11.6 per cent year-on-year in the December quarter.&nbsp;

Additionally, investment growth was above 10 per cent for the second consecutive quarter and the construction sector grew by more than nine per cent.&nbsp;

However, the farming sector which accounts for about 15 per cent of the Indian economy reduced by 0.8 per cent, compared with 1.6 per cent growth in the second quarter.

Also Read |&nbsp;<a href="https://www.wionews.com/business-economy/oecd-raises-india-and-global-growth-outlook-for-2024-687238">OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'</a>

The “robust” third-quarter growth “shows the strength of Indian economy and its potential,” said PM Modi, in a post on X.&nbsp;

He added, “Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat (Developed India)!”&nbsp;

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Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat!
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<h2>Growth estimates raised</h2>

The Ministry of Statistics and Programme Implementation data released on Thursday, also shows that the Indian economy is expected to grow&nbsp; at 7.6 per cent this year.&nbsp;

In its <a href="https://www.wionews.com/business-economy/indian-economy-to-grow-by-73-per-cent-says-governments-advance-estimate-676939">first estimates</a> released last month, the NSO had projected a growth of 7.3 per cent in 2023-24.&nbsp;

(With inputs from agencies) 
&nbsp;

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29) marking the fastest pace with which the economy grew in one-and-half years, beating all estimates.

India’s Gross Domestic Product (GDP) grew 8.4 per cent in the third quarter (October-December quarter), according to the data released by the National Statistical Office (NSO) on Thursday (Feb 29) marking the fastest pace with which the economy grew in one-and-half years, beating all estimates. India’s economic growth beats estimates The economic growth reported for the third quarter was much higher than the estimated 6.6 per cent by economists, according to a Reuters poll. It was also higher than the revised growth of 8.1 per cent in the previous quarter which stood at 7.6 per cent in the three months ending September 30. Also Read | Decoding the Modi government's white paper on Indian economy This growth has been attributed to strong manufacturing and construction activity in India. Prime Minister Narendra Modi’s government has raised spending on infrastructure and incentivised manufacturing of phones, electronics, drones and semiconductors. Manufacturing, over the past decade, has accounted for 17 per cent of India’s economy and expanded 11.6 per cent year-on-year in the December quarter. Additionally, investment growth was above 10 per cent for the second consecutive quarter and the construction sector grew by more than nine per cent. However, the farming sector which accounts for about 15 per cent of the Indian economy reduced by 0.8 per cent, compared with 1.6 per cent growth in the second quarter. Also Read | OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk' The “robust” third-quarter growth “shows the strength of Indian economy and its potential,” said PM Modi, in a post on X. He added, “Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat (Developed India)!” Robust 8.4% GDP growth in Q3 2023-24 shows the strength of Indian economy and its potential. Our efforts will continue to bring fast economic growth which shall help 140 crore Indians lead a better life and create a Viksit Bharat! — Narendra Modi (@narendramodi) February 29, 2024 × Growth estimates raised The Ministry of Statistics and Programme Implementation data released on Thursday, also shows that the Indian economy is expected to grow at 7.6 per cent this year. In its first estimates released last month, the NSO had projected a growth of 7.3 per cent in 2023-24. (With inputs from agencies)

India's GDP grew 8.4% in Q3; economy expected to grow 7.6% this year

Bereft of funds, the Finance Ministry wants Oil &amp; Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to initially spend the Rs 3,200 crores ($390mn)&nbsp;required for drilling wells to find oil and natural gas in the high seas.

“ONGC and OIL will take up this work on behalf of the Ministry of Petroleum &amp; Natural Gas and the cost for drilling of these wells would be initially borne by ONGC and OIL,” says the Expenditure Finance Committee (EFC) order.

The Petroleum Ministry had sought budgetary support to drill four stratigraphic wells in Category II and Category III basins in India’s offshore region to obtain critical data for a robust modelling of petroleum reserves. Usually, the Directorate General of Hydrocarbons conducts such searches through budgetary support.

Though the Expenditure Department had approved the ministry’s hydrocarbon hunt, the EFC – headed by Finance Secretary -- decided that ONGC and OIL bear the expedition cost and their losses, if any, in this venture be reimbursed through gross budgetary support.

<a href="https://www.wionews.com/india-news/india-starts-oil-production-from-delayed-5-billion-deep-water-project-in-krishna-godavari-basin-677894">Also read |&nbsp;India starts oil extraction from $5 billion deep-water project in Krishna Godavari basin</a>

The onus of initial spending was shifted onto ONGC and OIL as the EFC said that fiscal constraint was a major issue and that the “fiscal situation had changed post presentation in the Budget”.

Officials said that subsequent to the budget announcement, there has been substantial increase in the expenditure on the revenue side which was not envisioned in the budget. As a result, there was not much fiscal space available.

The EFC has therefore ordained that “ONGC and OIL will take up this work on behalf of government. They will engage international expertise for the determination of well location. The cost&nbsp;incurred for drilling these wells would be borne by ONGC and OIL”.

“In case a discovery is made, the drilling cost would be recovered from successful bidders. However, when no discovery is made (in case of dry well), 90 percent of the estimated cost of Rs 3,200 Crores or the actuals, whichever is lower, will be borne by the government through gross budgetary support,” it said.

What that means is that if a discovery is made, 150 per cent of the drilling cost of the discovered well shall be recovered from the successful bidder whenever the block is awarded through the Open Acreage Licensing Policy regime.

In case no discovery is made, or the well is found dry, data from the well would be differentially priced so that at least 10 per cent of the cost is recovered from the purchasers of the well data from the National Data Repository.

For calculating the unrecovered expenditure on the drilling, the total cost of all four wells and the total recovery from all four wells shall be considered and the shortfall will be treated as “unrecovered actual expenditure”.

This expenditure will be reviewed by a committee under the chairmanship of Petroleum Secretary along with officials of NITI Aayog and Office of Chief Advisor Cost, and it will work out the amount to be reimbursed to the two national oil companies.

The committee will submit its recommendation to the Petroleum Minister who would approach the Budget Division in the Department of Economic Affairs for budgetary support.

Also watch |&nbsp;PM Modi in Goa: Key projects to be unveiled

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/pm-modi-in-goa-key-projects-to-be-unveiled-687411/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

India’s&nbsp;primary objective of drilling these wells is to gather stratigraphic information of the basin and to understand the depth of play systems so that private operators are encouraged to take up exploration and production in them.

Stratigraphy is&nbsp;a branch of geology concerned with the study of rock layers (strata) and layering (stratification). It is primarily used in the study of sedimentary and layered volcanic rocks. It is used for preparing property maps to get a possible regional trend which can give the components of depositional environment.

&nbsp;

Bereft of funds, the Finance Ministry wants Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to initially spend the Rs 3,200 crores ($390mn) required for drilling wells to find oil and natural gas in the high seas.

Bereft of funds, the Finance Ministry wants Oil & Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to initially spend the Rs 3,200 crores ($390mn) required for drilling wells to find oil and natural gas in the high seas. “ONGC and OIL will take up this work on behalf of the Ministry of Petroleum & Natural Gas and the cost for drilling of these wells would be initially borne by ONGC and OIL,” says the Expenditure Finance Committee (EFC) order. The Petroleum Ministry had sought budgetary support to drill four stratigraphic wells in Category II and Category III basins in India’s offshore region to obtain critical data for a robust modelling of petroleum reserves. Usually, the Directorate General of Hydrocarbons conducts such searches through budgetary support. Though the Expenditure Department had approved the ministry’s hydrocarbon hunt, the EFC – headed by Finance Secretary -- decided that ONGC and OIL bear the expedition cost and their losses, if any, in this venture be reimbursed through gross budgetary support. Also read | India starts oil extraction from $5 billion deep-water project in Krishna Godavari basin The onus of initial spending was shifted onto ONGC and OIL as the EFC said that fiscal constraint was a major issue and that the “fiscal situation had changed post presentation in the Budget”. Officials said that subsequent to the budget announcement, there has been substantial increase in the expenditure on the revenue side which was not envisioned in the budget. As a result, there was not much fiscal space available. The EFC has therefore ordained that “ONGC and OIL will take up this work on behalf of government. They will engage international expertise for the determination of well location. The cost incurred for drilling these wells would be borne by ONGC and OIL”. “In case a discovery is made, the drilling cost would be recovered from successful bidders. However, when no discovery is made (in case of dry well), 90 percent of the estimated cost of Rs 3,200 Crores or the actuals, whichever is lower, will be borne by the government through gross budgetary support,” it said. What that means is that if a discovery is made, 150 per cent of the drilling cost of the discovered well shall be recovered from the successful bidder whenever the block is awarded through the Open Acreage Licensing Policy regime. In case no discovery is made, or the well is found dry, data from the well would be differentially priced so that at least 10 per cent of the cost is recovered from the purchasers of the well data from the National Data Repository. For calculating the unrecovered expenditure on the drilling, the total cost of all four wells and the total recovery from all four wells shall be considered and the shortfall will be treated as “unrecovered actual expenditure”. This expenditure will be reviewed by a committee under the chairmanship of Petroleum Secretary along with officials of NITI Aayog and Office of Chief Advisor Cost, and it will work out the amount to be reimbursed to the two national oil companies. The committee will submit its recommendation to the Petroleum Minister who would approach the Budget Division in the Department of Economic Affairs for budgetary support. Also watch | PM Modi in Goa: Key projects to be unveiled India’s primary objective of drilling these wells is to gather stratigraphic information of the basin and to understand the depth of play systems so that private operators are encouraged to take up exploration and production in them. Stratigraphy is a branch of geology concerned with the study of rock layers (strata) and layering (stratification). It is primarily used in the study of sedimentary and layered volcanic rocks. It is used for preparing property maps to get a possible regional trend which can give the components of depositional environment.

Exclusive: FinMin asks ONGC, OIL to fund India’s hydrocarbon hunt; promises to reimburse losses

The Reserve Bank of India (RBI) has released its February bulletin, painting a picture of stabilising inflation and promising economic prospects for India in 2024.

According to the RBI bulletin, while inflation expectations may edge down, renewed pressures from certain sectors remains a possibility.

Retail inflation in January was recorded at a three-month low of 5.1 per cent , signalling positive developments in the overall inflation scenario.

The central bank's monthly bulletin titled 'State of the Economy' highlighted the favourable conditions emerging both domestically and globally.

As per RBI's assessment, the Indian economy maintains its momentum, supported by promising high-frequency indicators.

The bulletin expressed optimism about corporate expansion strategies, fuelled by expectations of increased demand.

“Ex­pectations of a fresh round of capex by the corporate sector is likely to fuel the next leg of growth,” RBI said in its press release.

"Core inflation is at its lowest since October 2019," it added, hinting at a positive outlook for input costs and manufacturing firm selling prices.

The bulletin also addressed fiscal matters, with internal simulations indicating a promising trajectory for India's debt-to-GDP ratio.

The RBI projected a decrease to 73.4 per cent by 2030-31, a notable improvement from the IMF's forecast of 78.2 per cent.

Dismissing concerns raised by the IMF, the RBI emphasised that fiscal tightening is not immediately warranted.

In another article titled 'The Shape of Growth Compatible Fiscal Consolidation', the RBI outlined strategies for fiscal consolidation, advocating for a focus on developmental expenditure.

This includes investments in health, education, digitalisation, and climate risk mitigation, aiming to drive sustainable growth.

The article highlighted the potential of directing government spending towards employment-generating sectors, which could significantly reduce the debt-GDP ratio by 2030-31.

&nbsp;“We find that if government expenditure is directed towards the above-mentioned segments, the debt-GDP ratio of the general government can decline substantially to 73.4 per cent of GDP by 2030-31,” the article said.

Regarding inflation dynamics, the bulletin explored the impact of recent shocks on headline and core inflation.

Despite supply-side disruptions caused by events like the COVID-19 pandemic and geopolitical tensions, various core inflation measures have held up well.

The long-term convergence of non-core to core inflation&nbsp;remains a notable observation. Core inflation refers to the&nbsp;change in prices for goods and services, excluding those from the food and energy sectors.

“Since early 2020, multiple supply side shocks, particularly in food and energy, have led to some degree of persistence in headline inflation. This led to spillovers from non-core to core inflation weakening some properties of core inflation, although in the long-run, non-core inflation still converges to core inflation”, the article said.

Lastly, the bulletin said that evolving business sentiments underscored the resilience of Indian services and infrastructure sectors.

Despite pandemic-induced challenges, both sectors exhibited a gradual rebound in confidence, as reflected in the Services and Infrastructure Outlook Survey (SIOS) conducted by the RBI.

(With inputs from agencies)

The Reserve Bank of India (RBI) has released its February bulletin, painting a picture of stabilising inflation and promising economic prospects for India in 2024.

The Reserve Bank of India (RBI) has released its February bulletin, painting a picture of stabilising inflation and promising economic prospects for India in 2024. According to the RBI bulletin, while inflation expectations may edge down, renewed pressures from certain sectors remains a possibility. Retail inflation in January was recorded at a three-month low of 5.1 per cent , signalling positive developments in the overall inflation scenario. The central bank's monthly bulletin titled 'State of the Economy' highlighted the favourable conditions emerging both domestically and globally. As per RBI's assessment, the Indian economy maintains its momentum, supported by promising high-frequency indicators. The bulletin expressed optimism about corporate expansion strategies, fuelled by expectations of increased demand. “Expectations of a fresh round of capex by the corporate sector is likely to fuel the next leg of growth,” RBI said in its press release. "Core inflation is at its lowest since October 2019," it added, hinting at a positive outlook for input costs and manufacturing firm selling prices. The bulletin also addressed fiscal matters, with internal simulations indicating a promising trajectory for India's debt-to-GDP ratio. The RBI projected a decrease to 73.4 per cent by 2030-31, a notable improvement from the IMF's forecast of 78.2 per cent. Dismissing concerns raised by the IMF, the RBI emphasised that fiscal tightening is not immediately warranted. In another article titled 'The Shape of Growth Compatible Fiscal Consolidation', the RBI outlined strategies for fiscal consolidation, advocating for a focus on developmental expenditure. This includes investments in health, education, digitalisation, and climate risk mitigation, aiming to drive sustainable growth. The article highlighted the potential of directing government spending towards employment-generating sectors, which could significantly reduce the debt-GDP ratio by 2030-31. “We find that if government expenditure is directed towards the above-mentioned segments, the debt-GDP ratio of the general government can decline substantially to 73.4 per cent of GDP by 2030-31,” the article said. Regarding inflation dynamics, the bulletin explored the impact of recent shocks on headline and core inflation. Despite supply-side disruptions caused by events like the COVID-19 pandemic and geopolitical tensions, various core inflation measures have held up well. The long-term convergence of non-core to core inflation remains a notable observation. Core inflation refers to the change in prices for goods and services, excluding those from the food and energy sectors. “Since early 2020, multiple supply side shocks, particularly in food and energy, have led to some degree of persistence in headline inflation. This led to spillovers from non-core to core inflation weakening some properties of core inflation, although in the long-run, non-core inflation still converges to core inflation”, the article said. Lastly, the bulletin said that evolving business sentiments underscored the resilience of Indian services and infrastructure sectors. Despite pandemic-induced challenges, both sectors exhibited a gradual rebound in confidence, as reflected in the Services and Infrastructure Outlook Survey (SIOS) conducted by the RBI. (With inputs from agencies)

India's inflation prospects stabilise, economy poised for growth: RBI Bulletin

India's retail inflation dipped to a three-month low of 5.10 per cent in January, fueled by slower price increases in certain food items, according to recent data. <o:p></o:p>

While this decline aligns with economists' forecasts, the Reserve Bank of India (RBI) is expected to maintain its cautious stance on interest rates, considering inflation remains above its target rate.<o:p></o:p>

"The CPI inflation came in slightly softer than our expectations," Reuters quoted Upasna Bhardwaj, chief economist at Kotak Mahindra Bank as saying. <o:p></o:p>

However, she emphasised uncertainties surrounding food inflation, which are likely to keep the central bank vigilant in the near term.<o:p></o:p>

Food inflation, a significant component of the overall consumer price basket, registered a notable decrease in January, standing at 8.30 per cent compared to 9.53 per cent in December. <o:p></o:p>

Prices of cereals and vegetables, in particular, witnessed moderation, offering a glimmer of hope for easing inflationary pressures. <o:p></o:p>

Despite these improvements, concerns persist over volatile food prices, driven by factors such as climate vagaries and supply shocks.<o:p></o:p>

Gaura Sen Gupta, an economist at IDFC First Bank, noted the persistent weakness in housing inflation, juxtaposed with robust urban demand. <o:p></o:p>

India's economic resilience has been evident, with growth outpacing expectations in recent quarters. <o:p></o:p>

The economy expanded by 7.6 per cent in the July-September quarter, surpassing earlier projections. <o:p></o:p>

Despite this growth momentum, the RBI remains cautious, citing ongoing challenges posed by food price shocks and geopolitical tensions.<o:p></o:p>

In response to inflationary pressures, India has implemented measures such as lowering stock limits for certain commodities and imposing export bans to stabilise prices. <o:p></o:p>

Economists anticipate that these initiatives, coupled with moderating food prices, could provide relief from inflationary pressures in the coming months. <o:p></o:p>

Shilan Shah, deputy chief emerging markets economist at Capital Economics, expressed optimism, suggesting that rate cuts might become a consideration in the latter half of the year.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

India's retail inflation dipped to a three-month low of 5.10 per cent in January, fueled by slower price increases in certain food items, according to recent data.

India's retail inflation dipped to a three-month low of 5.10 per cent in January, fueled by slower price increases in certain food items, according to recent data. While this decline aligns with economists' forecasts, the Reserve Bank of India (RBI) is expected to maintain its cautious stance on interest rates, considering inflation remains above its target rate. "The CPI inflation came in slightly softer than our expectations," Reuters quoted Upasna Bhardwaj, chief economist at Kotak Mahindra Bank as saying. However, she emphasised uncertainties surrounding food inflation, which are likely to keep the central bank vigilant in the near term. Food inflation, a significant component of the overall consumer price basket, registered a notable decrease in January, standing at 8.30 per cent compared to 9.53 per cent in December. Prices of cereals and vegetables, in particular, witnessed moderation, offering a glimmer of hope for easing inflationary pressures. Despite these improvements, concerns persist over volatile food prices, driven by factors such as climate vagaries and supply shocks. Gaura Sen Gupta, an economist at IDFC First Bank, noted the persistent weakness in housing inflation, juxtaposed with robust urban demand. India's economic resilience has been evident, with growth outpacing expectations in recent quarters. The economy expanded by 7.6 per cent in the July-September quarter, surpassing earlier projections. Despite this growth momentum, the RBI remains cautious, citing ongoing challenges posed by food price shocks and geopolitical tensions. In response to inflationary pressures, India has implemented measures such as lowering stock limits for certain commodities and imposing export bans to stabilise prices. Economists anticipate that these initiatives, coupled with moderating food prices, could provide relief from inflationary pressures in the coming months. Shilan Shah, deputy chief emerging markets economist at Capital Economics, expressed optimism, suggesting that rate cuts might become a consideration in the latter half of the year. (With inputs from Reuters)

India's retail inflation slips to 3-month low, yet rate cuts unlikely amid lingering concerns

The Narendra Modi government released a white paper, claiming their strategic policies, commitment to reforms, and strong leadership led to India's economic transformation over the past decade on Friday.

Shifting gears

The document contrasts the current regime with the previous United Progressive Alliance (UPA) era, blaming "policy paralysis, fiscal irresponsibility, and corruption" for India's earlier struggles.

It credits the BJP-led government with propelling the nation from the "Fragile Five" to the world's fifth-largest economy through sound economic management.

UPA's legacy

The white paper criticises the UPA government for jeopardising macroeconomic stability, citing high inflation and irresponsible fiscal deficits.

The 2014 banking crisis, attributed to undisclosed bad loans, is labelled as a significant UPA legacy.

A Credit Suisse report highlighting "significant undisclosed liabilities" is used to emphasise the crisis's severity.

Modi's reform agenda

The document claims the Modi government tackled the banking crisis head-on, increased capital spending, and achieved fiscal consolidation upon taking office.

These measures, it argues, not only improved India's international standing but also paved the way for sustained high growth.

Investing in the future

The government claims to have addressed challenges inherited from the UPA era while investing in both the foundation and superstructure of the economy.

The white paper underlines that fiscal consolidation and improved government spending quality were achieved without compromising on welfare programs, citing statistics and observations from multilateral institutions as support.

Discipline amid crisis

Acknowledging that some improvements were influenced by external factors, the document criticises the UPA's "reckless lending" and ensuing bad loans crisis.

It commends the Modi government's ability to maintain fiscal discipline even during the pandemic and achieve faster-than-expected fiscal consolidation, attributing this to their "political capital."

Centralised approach

The white paper subtly attributes the success to a centralised approach under the current government, highlighting improved implementation of welfare and infrastructure programs.

It cites a shift from sporadic coverage to "saturation coverage," ensuring basic necessities reach beneficiaries through targeted support.

The share of capital expenditure in total spending has also increased, with efficiency in utilisation boosted by a "Whole of Government" approach leveraging Gati Shakti and Pragati initiatives.

The Narendra Modi government released a white paper, claiming their strategic policies, commitment to reforms, and strong leadership led to India's economic transformation over the past decade on Friday.

The Narendra Modi government released a white paper, claiming their strategic policies, commitment to reforms, and strong leadership led to India's economic transformation over the past decade on Friday. Shifting gears The document contrasts the current regime with the previous United Progressive Alliance (UPA) era, blaming "policy paralysis, fiscal irresponsibility, and corruption" for India's earlier struggles. It credits the BJP-led government with propelling the nation from the "Fragile Five" to the world's fifth-largest economy through sound economic management. UPA's legacy The white paper criticises the UPA government for jeopardising macroeconomic stability, citing high inflation and irresponsible fiscal deficits. The 2014 banking crisis, attributed to undisclosed bad loans, is labelled as a significant UPA legacy. A Credit Suisse report highlighting "significant undisclosed liabilities" is used to emphasise the crisis's severity. Modi's reform agenda The document claims the Modi government tackled the banking crisis head-on, increased capital spending, and achieved fiscal consolidation upon taking office. These measures, it argues, not only improved India's international standing but also paved the way for sustained high growth. Investing in the future The government claims to have addressed challenges inherited from the UPA era while investing in both the foundation and superstructure of the economy. The white paper underlines that fiscal consolidation and improved government spending quality were achieved without compromising on welfare programs, citing statistics and observations from multilateral institutions as support. Discipline amid crisis Acknowledging that some improvements were influenced by external factors, the document criticises the UPA's "reckless lending" and ensuing bad loans crisis. It commends the Modi government's ability to maintain fiscal discipline even during the pandemic and achieve faster-than-expected fiscal consolidation, attributing this to their "political capital." Centralised approach The white paper subtly attributes the success to a centralised approach under the current government, highlighting improved implementation of welfare and infrastructure programs. It cites a shift from sporadic coverage to "saturation coverage," ensuring basic necessities reach beneficiaries through targeted support. The share of capital expenditure in total spending has also increased, with efficiency in utilisation boosted by a "Whole of Government" approach leveraging Gati Shakti and Pragati initiatives.

Decoding the Modi government's white paper on Indian economy

WION's Business Desk brings you this daily round up of global stories from the world of business and economy.&nbsp;

RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24

The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent. This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023.&nbsp;

<a href="https://www.wionews.com/business-economy/rbi-keeps-interest-rates-steady-at-65pc-revises-gdp-growth-outlook-for-2023-24-688105">Read more&nbsp;</a>

Nvidia's soaring value nears Amazon amid AI frenzy: Report

Nvidia, the AI chipmaker, is on the verge of surpassing Amazon in market value, fuelled by Wall Street's fervour for artificial intelligence.&nbsp;

<a href="https://www.wionews.com/business-economy/nvidias-soaring-value-nears-amazon-in-ai-frenzy-report-688103">Read more&nbsp;</a>

China faces its biggest deflation threat since 2009 as consumer prices plummet

China encountered its deepest deflationary threat since 2009 as consumer prices witnessed a severe decline in January, highlighting the persistent challenges for the world's second-largest economy in its struggle for recovery.

<a href="https://www.wionews.com/business-economy/china-faces-deepest-deflation-risks-since-2009-as-consumer-prices-plummet-688110">Read more&nbsp;</a>

Mexico surpasses China as top source of US imports amid global economic shifts

In a significant economic shift, Mexico has emerged as the leading source of goods imported to the United States, overtaking China for the first time in more than two decades.

<a href="here https://www.wionews.com/business-economy/mexico-surpasses-china-as-top-source-of-us-imports-amid-global-economic-shifts-688161">Read more</a>

Uncertainty looms over US treasury market as Fed signals caution

In a twist for the fixed-income market, uncertainty is making a comeback after the Federal Reserve's recent statements and robust economic data threw a curveball into expectations.

<a href="here https://www.wionews.com/business-economy/uncertainty-looms-over-us-treasury-market-as-fed-signals-caution-688134">Read more</a>

UAE's ADIA unveils ambitious $4-5bn investment plan in India via Gujarat's finance hub

The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is preparing to launch a substantial $4-5 billion fund aimed at investing in India through the tax-neutral finance hub in Gujarat, known as Gujarat International Finance Tec-City (GIFT City).

<a href="here https://www.wionews.com/business-economy/uaes-adia-unveils-ambitious-4-5bn-investment-plan-in-india-via-gujarats-finance-hub-688141">Read more</a>

Snap faces investor backlash as ad revenue stumbles against tech giants Meta, Alphabet

In a staggering downturn, Snap, the parent company of Snapchat, witnessed a sharp decline of over 32 per cent in its shares on Wednesday, following disappointing fourth-quarter revenue results that fell short of Wall Street expectations.

<a href="https://www.wionews.com/business-economy/snap-faces-investor-backlash-as-ad-revenue-stumbles-against-tech-giants-meta-alphabet-688153">Read more</a>

German property market faces bleak outlook as TAG Immobilen warns of 30pc price decline

In a stark warning, TAG Immobilen, one of Germany's largest landlords, has forecasted that home prices in the country could plunge as much as 30 per cent below their 2022 peak, portraying a more pessimistic outlook than its counterparts.

<a href="here https://www.wionews.com/business-economy/german-property-market-faces-bleak-outlook-as-tag-immobilen-warns-of-30pc-price-decline-688156">Read more</a>

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24 The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.

WION's Business Desk brings you this daily round up of global stories from the world of business and economy. RBI keeps interest rates steady at 6.5pc, revises GDP growth outlook for 2023-24 The Reserve Bank of India (RBI) has opted to maintain the status quo on interest rates, keeping the repo rates unchanged at 6.5 per cent. This decision marks a continuation of the RBI's approach over the past year, where the repo rate has remained at 6.5 per cent since the last increase in February 2023. Read more Nvidia's soaring value nears Amazon amid AI frenzy: Report Nvidia, the AI chipmaker, is on the verge of surpassing Amazon in market value, fuelled by Wall Street's fervour for artificial intelligence. Read more China faces its biggest deflation threat since 2009 as consumer prices plummet China encountered its deepest deflationary threat since 2009 as consumer prices witnessed a severe decline in January, highlighting the persistent challenges for the world's second-largest economy in its struggle for recovery. Read more Mexico surpasses China as top source of US imports amid global economic shifts In a significant economic shift, Mexico has emerged as the leading source of goods imported to the United States, overtaking China for the first time in more than two decades. Read more Uncertainty looms over US treasury market as Fed signals caution In a twist for the fixed-income market, uncertainty is making a comeback after the Federal Reserve's recent statements and robust economic data threw a curveball into expectations. Read more UAE's ADIA unveils ambitious $4-5bn investment plan in India via Gujarat's finance hub The Abu Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the UAE, is preparing to launch a substantial $4-5 billion fund aimed at investing in India through the tax-neutral finance hub in Gujarat, known as Gujarat International Finance Tec-City (GIFT City). Read more Snap faces investor backlash as ad revenue stumbles against tech giants Meta, Alphabet In a staggering downturn, Snap, the parent company of Snapchat, witnessed a sharp decline of over 32 per cent in its shares on Wednesday, following disappointing fourth-quarter revenue results that fell short of Wall Street expectations. Read more German property market faces bleak outlook as TAG Immobilen warns of 30pc price decline In a stark warning, TAG Immobilen, one of Germany's largest landlords, has forecasted that home prices in the country could plunge as much as 30 per cent below their 2022 peak, portraying a more pessimistic outlook than its counterparts. Read more

WION Business Wrap | UAE's investment in India, Nvidia's valuation surge and more

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices.

<h2>About India’s growth forecast</h2>

According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent.&nbsp;

The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.”&nbsp;

ALSO READ |<a href="https://www.wionews.com/india-news/cancel-culture-to-370-seats-key-takeaways-from-pm-modis-parliament-speech-687202">&nbsp;'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech</a>

India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum.&nbsp;

The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year.&nbsp;

<h2>What about global growth?</h2>

According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast.&nbsp;

Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated.&nbsp;

“The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement.&nbsp;

The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation.&nbsp;

The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent.&nbsp;

<h2>The Middle East factor</h2>

According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures.&nbsp;

Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/federal-reserve-chair-powell-signals-prudence-in-considering-rate-cuts-amid-strong-economy-687124">Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy</a>

“High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report.&nbsp;

Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference.&nbsp;

The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year.&nbsp;

(With inputs from agencies) 
&nbsp;

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well.

The Organisation for Economic Co-operation and Development (OECD) raised its world economic growth forecast for 2024, on Monday (Feb 5) and lifted the outlook for India’s economy as well. However, the Paris-based organisation warned that the conflict in the Middle East posed a threat to global growth as disruptions in Red Sea shipping may increase consumer prices. About India’s growth forecast According to the OECD’s latest growth forecast, the Indian economy is expected to grow 6.2 per cent which is up from 6.1 per cent predicted in its November report. Meanwhile, the prediction for 2025 in both reports remained unchanged at 6.5 per cent. The OECD’s latest report noted that “clear signs of strong near-term momentum continue in India, relative weakness in Europe, and mild near-term growth in most other major economies.” ALSO READ | 'Cancel culture to 370+ seats': Key takeaways from PM Modi's Parliament speech India is also expected to expand steadily over the next two years, according to the OECD, due to “strong investment growth” and GDP rising by more than six per cent per annum. The report also noted that in countries like Brazil, India, Indonesia, Mexico and South Africa, the inflation is expected to ease and converge on or towards the central bank targets by the end of next year. What about global growth? According to the Paris-based organisation, the global economy is on course to hold up better this year than expected with world economic growth expected at 2.9 per cent, which is up from 2.7 per cent predicted in its previous forecast. Global growth “proved unexpectedly resilient” in 2023, reaching 3.1 per cent, according to the report and the inflation declined faster than anticipated. “The global economy has shown real resilience amid the high inflation of the past two years and the necessary monetary policy tightening. Growth has held up, and we expect inflation to be back to central bank targets by the end of 2025 in most G20 economies,” said OECD Secretary-General Mathias Cormann, in a statement. The global growth is also said to have been expanded as the United States economy is expected to grow 2.1 per cent in 2024 which is up from 1.5 per cent predicted in OECD’s November forecast as lower inflation boosted wage growth and is expected to trigger interest rate cuts, said the organisation. The growth forecast for the US economy for 2025 remained unchanged at 1.7 per cent. The Middle East factor According to the OECD, the attacks on Red Sea shipping lanes by Yemen’s Houthi rebels and the ongoing war between Israel and the Palestinian militant group Hamas in Gaza could add to inflationary pressures. Houthis have said that they are targeting Israel-linked ships in solidarity with the Palestinians. Meanwhile, the US and the United Kingdom have responded with strikes against the Houthis. ALSO READ | Federal Reserve Chair Powell signals prudence in considering rate cuts amid strong economy “High geopolitical tensions are a significant near-term risk to activity and inflation, particularly if the conflict in the Middle East were to disrupt energy markets,” said the OECD report. Similarly, OECD chief economist Clare Lombardelli, noted that the attacks on Red Sea shipping are already affecting the trade. “Freight rates have more than doubled since the end of last year,” Lombardelli said at a news conference. The OECD warned that the increase in shipping costs, if persistent, could add 0.4 percentage points to consumer prices inflation after about a year. (With inputs from agencies)

OECD raises India and global growth outlook for 2024, warns of Middle East crisis 'risk'

Budget 2024: India's Finance Minister Nirmala Sitharaman on Thursday (Feb 1) presented India's interim Budget in Parliament of India. All eyes were on the budget as Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) is due to face Lok Sabha elections (general elections) in a matter of months.

Although an interim budget presented just months before elections hold largely a symbolic value, it does give hint to what direction government wants to take especially when public gaze is on it.

As she presented Budget 2024, Finance Minister Sitharaman projected a bright picture of Foreign Direct Investment (FDI) in India,

In her speech, she sought to underline that for the government, FDI stood for "First Develop India".

She said that the government of India was in the process of negotiating bilateral investment treaties with foreign partners across the world.

She described the period between years 2014 and 2023 as a 'golden era' in reference to Foreign Direct Investment (FDI) in India.

The finance minister said that in these nine years, Indian economy saw FDI inflow of about 596 billion. Sitharaman added that this was twice the inflow between the years 2005 and 2014.

PM Narendra Modi-led government assumed power after victory in 2014 Lok Sabha elections. The 2005-2014 period had Indian National Congress-led United Progressive Alliance (UPA) at the helm in India.

Also Read | <a href="https://www.wionews.com/india-news/india-budget-2024-for-railways-fm-sitharaman-says-3-major-economic-corridor-programmes-to-be-implemented-685834">India budget 2024: For railways, FM Sitharaman says 3 major economic corridor programmes to be implemented</a>

"The FDI inflow during 2014-23 was USD 596 billion marking a golden era. That is twice the inflow during 2005-14.  For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India’," said Sitharaman during her budget speech in the parliament.

Also Read | <a href="https://www.wionews.com/india-news/indian-interim-budget-key-takeaways-from-nirmala-sitharamans-budget-speech-685817">India interim Budget 2024: Key takeaways from Nirmala Sitharaman's speech</a>

FDI is often an indictor of stability of a country's economy. More FDI, in accordance with the laws, is considered to be sign that global investors have enough faith in a particular country's economy to make huge investments anticipating good returns.

(With inputs from agencies)&nbsp;

Budget 2024: India's Finance Minister Nirmala Sitharaman on Thursday (Feb 1) presented India's interim Budget in Parliament of India. All eyes were on the budget as Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) is due to face Lok Sabha elections (general elections) in a matter of months.

Budget 2024: India's Finance Minister Nirmala Sitharaman on Thursday (Feb 1) presented India's interim Budget in Parliament of India. All eyes were on the budget as Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) is due to face Lok Sabha elections (general elections) in a matter of months. Although an interim budget presented just months before elections hold largely a symbolic value, it does give hint to what direction government wants to take especially when public gaze is on it. As she presented Budget 2024, Finance Minister Sitharaman projected a bright picture of Foreign Direct Investment (FDI) in India, In her speech, she sought to underline that for the government, FDI stood for "First Develop India". She said that the government of India was in the process of negotiating bilateral investment treaties with foreign partners across the world. She described the period between years 2014 and 2023 as a 'golden era' in reference to Foreign Direct Investment (FDI) in India. The finance minister said that in these nine years, Indian economy saw FDI inflow of about 596 billion. Sitharaman added that this was twice the inflow between the years 2005 and 2014. PM Narendra Modi-led government assumed power after victory in 2014 Lok Sabha elections. The 2005-2014 period had Indian National Congress-led United Progressive Alliance (UPA) at the helm in India. Also Read | India budget 2024: For railways, FM Sitharaman says 3 major economic corridor programmes to be implemented "The FDI inflow during 2014-23 was USD 596 billion marking a golden era. That is twice the inflow during 2005-14.  For encouraging sustained foreign investment, we are negotiating bilateral investment treaties with our foreign partners, in the spirit of ‘first develop India’," said Sitharaman during her budget speech in the parliament. Also Read | India interim Budget 2024: Key takeaways from Nirmala Sitharaman's speech FDI is often an indictor of stability of a country's economy. More FDI, in accordance with the laws, is considered to be sign that global investors have enough faith in a particular country's economy to make huge investments anticipating good returns. (With inputs from agencies)

Budget 2024: FDI inflow marked 'golden period', says Finance Minister Nirmala Sitharaman

International Monetary Fund forecasted India's growth trajectory. India's economy is likely to grow at 6.5% in the financial year. According to the IMF, India's economy will grow at a similar pace the year after.

Ahead of interim budget, IMF raises India's growth forecast to 6.5% for next financial year

India marks its 75th Republic Day on January 26 -- the day its Constitution came into effect. A 1976 amendment to the Constitution added the word 'socialist' to the preamble.&nbsp;

Although never explicitly mentioned in the Constitution prior to 1976, socialist ideals have been a part of the Directive Principles of State Policy since Independence. For instance: Article 43 of the Constitution states that the State shall secure a living wage and a decent standard of life for workers.&nbsp;

India's socialism, however, differs from the Communist variety. Under Jawaharlal Nehru, India adopted a mixed economy, wherein the 'commanding heights of the economy' remained under the government's grip, but the private sector co-existed.&nbsp;

The 1948 Industrial policy and the second five-year plan (1956-1961) firmly established India's credentials as a mixed economy. However, the blueprint for the country's post-Independent economy could be traced to a pre-Independence plan.&nbsp;

The 'Bombay Plan'

In January 1944, a group of industrialists in Bombay (now Mumbai) came together to envision an economic policy for the soon-to-be-Independent India. The economic plan, titled 'Memorandum Outlining A Plan of Economic Development for India', is now popularly known as the 'Bombay Plan'.&nbsp;

The who's who of British India's business world, namely Purshotamdas Thakurdas, JRD Tata, GD Birla, Ardeshir Dalal, Shri Ram, Kasturbhai Lalbhai, AD Shroff and John Mathai, signed the vision document, which was released in two parts between 1944 and 1945.&nbsp;

The plan sought to double the per capita income of India within fifteen years, as part of three five-year plans.&nbsp;

"A threefold increase in our total national dividend would in effect mean a per capita income of Rs 135, representing a doubling of the 1931-32 figure (Rs 65)," the document read.&nbsp;

Boosting the per capita income was closely linked to raising the standard of living to a reasonable level by focusing on food, clothing, housing, health and education.&nbsp;

The 'Bombay Plan' argued that every Indian must get 2,800 calories per day on an average; a family of five must get a minimum of 500 square feet of housing; each person must get 30 yards of clothing.&nbsp;

In addition, it aimed for better healthcare facilities in towns and villages and full literacy for those between the ages of 11 and 50.&nbsp;

The key argument of the document was that State (read government) intervention would be necessary to fuel India's post-Independent economic growth.&nbsp;

"It is inevitable that in executing a comprehensive plan of economic development, especially in a country where the beginnings of such development have yet to be laid, the State should exercise in the interests of the community a considerable measure of intervention and control," the memorandum read.

Long story short: The decument urged the State to control strategic economic sectors, protect local industries from foreign competition, and ensure equitable distribution of resources across India.&nbsp;

Impact of 'Bombay Plan'&nbsp;

A striking aspect of the 1944 document is that it spoke of everything that Independent India carried out&nbsp;in the next four decades.&nbsp;

The plan also illustrated the need for a 'mixed economy' without even mentioning the concept.

It argued that the "distinction between capitalism and socialism has lost much of its significance from a practical standpoint".&nbsp;

There is little evidence to back that Nehru accepted the 'Bombay Plan'. But given how the economy shaped up&nbsp;after 1947, the plan has achieved a sort of "mythical status"&nbsp;in India's economic history.&nbsp;

However, the 'Hindu rate of growth' and the 'license-permit raj' witnessed between 1952 and 1991&nbsp;exposed the shortcomings of State control over resources,&nbsp;

The vision document also had its set of detractors. The Communists criticised it for not addressing the questions of income inequality and land reforms.&nbsp;

Veteran Communist leader BT Ranadive dismissed the plan, stating, “Without an equitable distribution of wealth... an all-round increase in the standard of living is not possible. A plan which defers distribution or ignores it cannot be called a ‘plan’."&nbsp;

That the vision emanated from a group of capitalists raised suspicion among the Communists and democratic socialists in the Congress party. Moreover, the plan did not have the approval of the entire business class, severely limiting its acceptability.&nbsp;

But the idea of a group of competing industrialists coming together to create an economic vision for a diverse country like India continues to capture the imagination of scholars in 2024.&nbsp;

India marks its 75th Republic Day on January 26 -- the day its Constitution came into effect. A 1976 amendment to the Constitution added the word 'socialist' to the preamble.

India marks its 75th Republic Day on January 26 -- the day its Constitution came into effect. A 1976 amendment to the Constitution added the word 'socialist' to the preamble. Although never explicitly mentioned in the Constitution prior to 1976, socialist ideals have been a part of the Directive Principles of State Policy since Independence. For instance: Article 43 of the Constitution states that the State shall secure a living wage and a decent standard of life for workers. India's socialism, however, differs from the Communist variety. Under Jawaharlal Nehru, India adopted a mixed economy, wherein the 'commanding heights of the economy' remained under the government's grip, but the private sector co-existed. The 1948 Industrial policy and the second five-year plan (1956-1961) firmly established India's credentials as a mixed economy. However, the blueprint for the country's post-Independent economy could be traced to a pre-Independence plan. The 'Bombay Plan' In January 1944, a group of industrialists in Bombay (now Mumbai) came together to envision an economic policy for the soon-to-be-Independent India. The economic plan, titled 'Memorandum Outlining A Plan of Economic Development for India', is now popularly known as the 'Bombay Plan'. The who's who of British India's business world, namely Purshotamdas Thakurdas, JRD Tata, GD Birla, Ardeshir Dalal, Shri Ram, Kasturbhai Lalbhai, AD Shroff and John Mathai, signed the vision document, which was released in two parts between 1944 and 1945. The plan sought to double the per capita income of India within fifteen years, as part of three five-year plans. "A threefold increase in our total national dividend would in effect mean a per capita income of Rs 135, representing a doubling of the 1931-32 figure (Rs 65)," the document read. Boosting the per capita income was closely linked to raising the standard of living to a reasonable level by focusing on food, clothing, housing, health and education. The 'Bombay Plan' argued that every Indian must get 2,800 calories per day on an average; a family of five must get a minimum of 500 square feet of housing; each person must get 30 yards of clothing. In addition, it aimed for better healthcare facilities in towns and villages and full literacy for those between the ages of 11 and 50. The key argument of the document was that State (read government) intervention would be necessary to fuel India's post-Independent economic growth. "It is inevitable that in executing a comprehensive plan of economic development, especially in a country where the beginnings of such development have yet to be laid, the State should exercise in the interests of the community a considerable measure of intervention and control," the memorandum read. Long story short: The decument urged the State to control strategic economic sectors, protect local industries from foreign competition, and ensure equitable distribution of resources across India. Impact of 'Bombay Plan' A striking aspect of the 1944 document is that it spoke of everything that Independent India carried out in the next four decades. The plan also illustrated the need for a 'mixed economy' without even mentioning the concept. It argued that the "distinction between capitalism and socialism has lost much of its significance from a practical standpoint". There is little evidence to back that Nehru accepted the 'Bombay Plan'. But given how the economy shaped up after 1947, the plan has achieved a sort of "mythical status" in India's economic history. However, the 'Hindu rate of growth' and the 'license-permit raj' witnessed between 1952 and 1991 exposed the shortcomings of State control over resources, The vision document also had its set of detractors. The Communists criticised it for not addressing the questions of income inequality and land reforms. Veteran Communist leader BT Ranadive dismissed the plan, stating, “Without an equitable distribution of wealth... an all-round increase in the standard of living is not possible. A plan which defers distribution or ignores it cannot be called a ‘plan’." That the vision emanated from a group of capitalists raised suspicion among the Communists and democratic socialists in the Congress party. Moreover, the plan did not have the approval of the entire business class, severely limiting its acceptability. But the idea of a group of competing industrialists coming together to create an economic vision for a diverse country like India continues to capture the imagination of scholars in 2024.

Flashback Friday: Revisiting the 1944 'Bombay Plan' and its vision for India

Mercedes-Benz celebrates a remarkable milestone in India, citing a record-breaking 10% surge in sales, reaching 17,408 units in 2023. This achievement reflects a burgeoning trend in India's economic affluence, with a significant focus on luxury spending.

As the leader in the luxury car market, Mercedes-Benz has experienced unprecedented growth, surpassing its previous all-time high of 15,822 units. Notably, the German automaker achieved its best-ever H2 and Q4 sales in India, maintaining its dominance for the ninth consecutive year.

Santosh Iyer, MD &amp; CEO of Mercedes-Benz India, highlights the evolving customer profile, emphasizing a notable increase in salaried backgrounds and a significant rise in female buyers, up by 50% compared to pre-COVID times. This shift is indicative of the changing demographics and the growing aspiration among young achievers.

Mercedes-Benz sees mini-metros as future growth engines, underlining the brand's strategic vision. The luxury carmaker notes a surge in SUV body styles, constituting 55% of its portfolio, with strong products like the new GLC SUV driving increased adoption.

A remarkable revelation is the substantial contribution from Top End Vehicles (TEVs), constituting nearly 25% of sales. The average age of buyers for these high-end vehicles, such as the S-Class, is a mere 38 years, showcasing the appeal to a younger demographic.

Furthermore, Mercedes-Benz emphasizes its commitment to the electric car segment, witnessing a 3X growth in the BEV portfolio, contributing 4% to CY 2023 sales. The company plans to add three more electric models to its lineup, acknowledging the gradual adoption of EVs among Indian customers.

Mercedes-Benz India, buoyed by this success, has launched the facelifted version of the GLS SUV, showcasing continued investment with Rs 200 crore allocated for new products, production enhancement, and digitization of manufacturing processes. Despite challenges in supply and demand, the company expresses optimism, targeting double-digit growth in 2024.

This achievement stands as a testament to India's rising economic affluence, with a discernible trend toward luxury spending, exemplified by the growing preference for premium vehicles and a forward-looking embrace of electric cars.

Mercedes-Benz celebrates a remarkable milestone in India, citing a record-breaking 10% surge in sales, reaching 17,408 units in 2023. This achievement reflects a burgeoning trend in India's economic affluence, with a significant focus on luxury spending.

Mercedes-Benz celebrates a remarkable milestone in India, citing a record-breaking 10% surge in sales, reaching 17,408 units in 2023. This achievement reflects a burgeoning trend in India's economic affluence, with a significant focus on luxury spending. As the leader in the luxury car market, Mercedes-Benz has experienced unprecedented growth, surpassing its previous all-time high of 15,822 units. Notably, the German automaker achieved its best-ever H2 and Q4 sales in India, maintaining its dominance for the ninth consecutive year. Santosh Iyer, MD & CEO of Mercedes-Benz India, highlights the evolving customer profile, emphasizing a notable increase in salaried backgrounds and a significant rise in female buyers, up by 50% compared to pre-COVID times. This shift is indicative of the changing demographics and the growing aspiration among young achievers. Mercedes-Benz sees mini-metros as future growth engines, underlining the brand's strategic vision. The luxury carmaker notes a surge in SUV body styles, constituting 55% of its portfolio, with strong products like the new GLC SUV driving increased adoption. A remarkable revelation is the substantial contribution from Top End Vehicles (TEVs), constituting nearly 25% of sales. The average age of buyers for these high-end vehicles, such as the S-Class, is a mere 38 years, showcasing the appeal to a younger demographic. Furthermore, Mercedes-Benz emphasizes its commitment to the electric car segment, witnessing a 3X growth in the BEV portfolio, contributing 4% to CY 2023 sales. The company plans to add three more electric models to its lineup, acknowledging the gradual adoption of EVs among Indian customers. Mercedes-Benz India, buoyed by this success, has launched the facelifted version of the GLS SUV, showcasing continued investment with Rs 200 crore allocated for new products, production enhancement, and digitization of manufacturing processes. Despite challenges in supply and demand, the company expresses optimism, targeting double-digit growth in 2024. This achievement stands as a testament to India's rising economic affluence, with a discernible trend toward luxury spending, exemplified by the growing preference for premium vehicles and a forward-looking embrace of electric cars.

What Mercedes-Benz India's latest results say about the economy

India's bid to host the 2036 Olympics marks a significant shift in its sports landscape. The country, with its large population and booming economy, aims to showcase its global prowess through this endeavor. Prime Minister Narendra Modi's commitment to leaving "no stone unturned" reflects a national aspiration for a prominent role in the international sports arena.

The recent successes of Indian athletes at the Tokyo Olympics, Birmingham Commonwealth Games, and Asian Games in Hangzhou have boosted confidence in India's ability to compete at the highest level. The government, under Modi's leadership, has implemented strategic initiatives like the "Khelo India" program and the "Target Olympic Podium Scheme" to foster talent and improve sports infrastructure, signaling a comprehensive approach to sports development.

However, challenges persist, as highlighted by the setbacks during the 2010 Commonwealth Games in Delhi. Infrastructure deficiencies and organizational issues raised doubts about India's readiness to host major sporting events. The choice of Ahmedabad as a potential host city for the 2036 Olympics has raised concerns about its capacity and preparedness.

While Ahmedabad has ambitious plans and has broken ground on facilities, questions about the city's ability to accommodate the expected influx of visitors and sustain the upgraded infrastructure post-Olympics remain. The need for substantial growth in hotel capacity and long-term planning for facility utilization poses logistical challenges.

India's dominance in cricket, often viewed as a hurdle for other sports, could be mitigated by the inclusion of cricket in the 2028 Los Angeles Olympics, offering a chance for the sport to share the spotlight. This aligns with Modi's vision of using sports as a tool for national integration and showcasing India's capabilities on a global stage.

In conclusion, India's bid to host the 2036 Olympics signifies a bold step towards establishing itself as a sports powerhouse. While challenges exist, the government's commitment to sports development and the nation's recent sporting achievements provide a strong foundation. Hosting the Olympics could potentially elevate India's global standing, attract investments, and foster a culture of sports beyond cricket.

India's bid to host the 2036 Olympics marks a significant shift in its sports landscape. The country, with its large population and booming economy, aims to showcase its global prowess through this endeavor.

India's bid to host the 2036 Olympics marks a significant shift in its sports landscape. The country, with its large population and booming economy, aims to showcase its global prowess through this endeavor. Prime Minister Narendra Modi's commitment to leaving "no stone unturned" reflects a national aspiration for a prominent role in the international sports arena. The recent successes of Indian athletes at the Tokyo Olympics, Birmingham Commonwealth Games, and Asian Games in Hangzhou have boosted confidence in India's ability to compete at the highest level. The government, under Modi's leadership, has implemented strategic initiatives like the "Khelo India" program and the "Target Olympic Podium Scheme" to foster talent and improve sports infrastructure, signaling a comprehensive approach to sports development. However, challenges persist, as highlighted by the setbacks during the 2010 Commonwealth Games in Delhi. Infrastructure deficiencies and organizational issues raised doubts about India's readiness to host major sporting events. The choice of Ahmedabad as a potential host city for the 2036 Olympics has raised concerns about its capacity and preparedness. While Ahmedabad has ambitious plans and has broken ground on facilities, questions about the city's ability to accommodate the expected influx of visitors and sustain the upgraded infrastructure post-Olympics remain. The need for substantial growth in hotel capacity and long-term planning for facility utilization poses logistical challenges. India's dominance in cricket, often viewed as a hurdle for other sports, could be mitigated by the inclusion of cricket in the 2028 Los Angeles Olympics, offering a chance for the sport to share the spotlight. This aligns with Modi's vision of using sports as a tool for national integration and showcasing India's capabilities on a global stage. In conclusion, India's bid to host the 2036 Olympics signifies a bold step towards establishing itself as a sports powerhouse. While challenges exist, the government's commitment to sports development and the nation's recent sporting achievements provide a strong foundation. Hosting the Olympics could potentially elevate India's global standing, attract investments, and foster a culture of sports beyond cricket.

What India's bid for the 2036 Olympics means for its economy

US Secretary of State Antony Blinken on Wednesday described India as an “extraordinary success story” and said that the policies and programs implemented by Prime Minister Narendra Modi have proven highly advantageous for the people of India.

US State Secretary Blinken Hails Modi's India at World Economic Forum

India is setting its sights on attracting a whopping $100 billion in annual foreign direct investment (FDI) in the coming years, according to Information Technology Minister Ashwini Vaishnaw.<o:p></o:p>

This is based on a Reuters report.<o:p></o:p>

In an interview at the World Economic Forum in Davos, Vaishnaw outlined a comprehensive growth strategy, foreseeing a consistent growth rate of 6-8 per cent over the next decade. <o:p></o:p>

The strategy revolves around four major engines: investment in physical and digital infrastructure, uplifting the bottom pyramid of the population, boosting manufacturing, and simplifying business processes to enhance the ease of doing business. <o:p></o:p>

Vaishnaw highlighted the key components of India's growth strategy, emphasising the significance of investment in infrastructure, both physical and digital.<o:p></o:p>

"We see 6-8 per cent consistent growth rate over the next full decade, and this is based on a very clearly thought-out strategy," he told Reuters. <o:p></o:p>

Foreign direct investment is a pivotal aspect of this plan, and Vaishnaw expressed optimism, asserting that India is now perceived as the "most important investment destination" by global investors. <o:p></o:p>

Despite previous critiques of Modi's protectionist policies, foreign investors, including major players like Apple, Samsung, Kia, and Airbus, have made substantial investments in India.<o:p></o:p>

India has been a magnet for foreign investment since Prime Minister Narendra Modi assumed office in 2014. Despite occasional criticism of protectionist policies, the country recorded FDI inflows of $33 billion in the first half of the current financial year and $71 billion in the 2022-23 financial year. <o:p></o:p>

The ambitious target of $100 billion in annual FDI is aimed at sustaining India's economic growth, which is projected to be the highest among major global economies at 7.3 per cent for the current financial year. <o:p></o:p>

This move aligns with Prime Minister Modi's efforts to attract investors ahead of the upcoming elections, addressing crucial issues such as unemployment among the youth.<o:p></o:p>

Vaishnaw drew a parallel with China's success in consistently attracting substantial FDI over more than a decade. <o:p></o:p>

He emphasised that investors now view India as the "most important investment destination". <o:p></o:p>

While India has made significant strides in various sectors, Vaishnaw underscored his role in overseeing India's push to become a powerhouse in electronics manufacturing, aligning with Modi's broader business agenda. <o:p></o:p>

He also highlighted ongoing efforts to enhance collaboration with Apple, aiming to boost the company's manufacturing and retail presence in India, where it currently contributes to approximately 12-14 per cent of global iPhone shipments.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

India is setting its sights on attracting a whopping $100 billion in annual foreign direct investment (FDI) in the coming years, according to Information Technology Minister Ashwini Vaishnaw.

India is setting its sights on attracting a whopping $100 billion in annual foreign direct investment (FDI) in the coming years, according to Information Technology Minister Ashwini Vaishnaw. This is based on a Reuters report. In an interview at the World Economic Forum in Davos, Vaishnaw outlined a comprehensive growth strategy, foreseeing a consistent growth rate of 6-8 per cent over the next decade. The strategy revolves around four major engines: investment in physical and digital infrastructure, uplifting the bottom pyramid of the population, boosting manufacturing, and simplifying business processes to enhance the ease of doing business. Vaishnaw highlighted the key components of India's growth strategy, emphasising the significance of investment in infrastructure, both physical and digital. "We see 6-8 per cent consistent growth rate over the next full decade, and this is based on a very clearly thought-out strategy," he told Reuters. Foreign direct investment is a pivotal aspect of this plan, and Vaishnaw expressed optimism, asserting that India is now perceived as the "most important investment destination" by global investors. Despite previous critiques of Modi's protectionist policies, foreign investors, including major players like Apple, Samsung, Kia, and Airbus, have made substantial investments in India. India has been a magnet for foreign investment since Prime Minister Narendra Modi assumed office in 2014. Despite occasional criticism of protectionist policies, the country recorded FDI inflows of $33 billion in the first half of the current financial year and $71 billion in the 2022-23 financial year. The ambitious target of $100 billion in annual FDI is aimed at sustaining India's economic growth, which is projected to be the highest among major global economies at 7.3 per cent for the current financial year. This move aligns with Prime Minister Modi's efforts to attract investors ahead of the upcoming elections, addressing crucial issues such as unemployment among the youth. Vaishnaw drew a parallel with China's success in consistently attracting substantial FDI over more than a decade. He emphasised that investors now view India as the "most important investment destination". While India has made significant strides in various sectors, Vaishnaw underscored his role in overseeing India's push to become a powerhouse in electronics manufacturing, aligning with Modi's broader business agenda. He also highlighted ongoing efforts to enhance collaboration with Apple, aiming to boost the company's manufacturing and retail presence in India, where it currently contributes to approximately 12-14 per cent of global iPhone shipments. (With inputs from Reuters)

India seeks $100 billion in annual FDI in coming years: Minister

In a noteworthy projection, Indian brokerage firm ICICI securities suggests that India could witness the emergence of not one but three companies with the potential to achieve a market value of 1 trillion rupees by 2032.

HDFC bank expected to reach Rs 1 trillion valuation soon

India home to 118k recognised start-ups; Gujarat, Karnataka, Kerala, Tamil Nadu top list.

India releases list of top start-up states; Gujarat, Karnataka, Kerala, Tamil Nadu top list

The outlook for 2024 is filled with twists and turns, according to insights shared by chief economists at the recent davos meeting. More than half of these top economic thinkers predict that the world's economic engine might sputter a bit this year, facing challenges from tight financial conditions, political disagreements, and the swift rise of generative artificial intelligence.

Chief economists flag growing wealth gap among nations

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