Lok Sabha results won't force India's budget to make significant policy shifts: Fitch
Fitch Ratings anticipates minimal policy shifts in India post-election losses. The upcoming July budget will detail economic reform plans and fiscal goals for the next five years, crucial for addressing fiscal metrics, reducing debt, potential deviations from capital expenditure commitments, the risk of heightened social spending, progress in judicial reforms at the state level, and reforms in the manufacturing sector. Key Points
Economic TimesIndia can grow at close to 9% by undertaking pending reforms: Arvind Panagariya
Next reforms have to be done at the level of the states and we have to persuade half a dozen states to adopt some of these reforms, Panagariya said at the Times Now Summit themed 'India Unstoppable'. India's economy grew at 8.4% in the third quarter of 2023-24, exceeding the expectations of analysts and economists. Key Points
Economic TimesNext generation reforms to avoid middle-income trap: Suman Bery
In an interview, NITI Aayog vice chairman Suman Bery discusses the impact of staying on the fiscal glide path on India's credit ratings and private investment. He praises the finance minister for staying the course on fiscal consolidation, which provides headroom for the Reserve Bank of India and impacts the credit ratings of corporates and banks. Bery notes that the timing is right for a huge capex cycle in the private sector and emphasizes the need for regulatory reforms, decentralization, and freeing up sectors like agriculture and energy. He also mentions the importance of transparency in land markets, digitization, and artificial intelligence. Additionally, Bery highlights the challenge of a growing population and the progress made in reducing multidimensional poverty, but suggests that more significant measures may be included in the full budget. Key Points
Economic TimesChina to choose fiscal muscle over big reforms to revive economy
China is planning to implement fiscal stimulus measures to support its economic recovery, relying on debt and state spending. Some government advisers are suggesting increasing the budget deficit target beyond 3% of GDP to issue more bonds. While China's economy grew faster than expected in Q3 2021, concerns remain about the decline of the private sector and the lack of long-term reforms needed for sustainable growth. The focus is currently on sustaining the fragile recovery. Key Points
Economic TimesMultilateral banks back reforms plan
The MDB reform programme will be taken up at the G20 finance ministers and central bank governors' (FMCGB) meeting in Marrakech under India's presidency on October 12-13. The reforms blueprint is derived from the report of the Independent Expert Group (IEG), co-chaired by 15th Finance Commission chairman NK Singh and former US treasury secretary Larry Summers, set up by the G20. Key Points
Economic Times
Indian economy to reach $5 trillion in 3 years; set to become 3rd largest economy: FinMin
As of January 29, the country's economy has been reported to be at $3.7 trillion, marking significant growth from its position as the 10th largest economy a decade ago, with a GDP of $1.9 trillion. Key Points
Business TodayIndependence Day Speech: PM Modi says world looking to invest in India as govt committed to big reforms
Prime Minister Narendra Modi reiterated his government's unwavering dedication to economic reforms on India's 78th Independence Day, emphasizing the transformational changes in banking, manufacturing, and skills development. He outlined a vision for a developed India by 2047, stressing that reforms are not driven by compulsion but by a commitment to national interest and growth. Modi highlighted achievements such as strengthened formal economy, improved credit access, and empowerment of citizens, underscoring the importance of good governance and modern infrastructure for progress. Key Points
Economic TimesInterim Budget: Road to reforms to go through states
States will get a Rs 75,000 crore boost in the form of interest-free loans to pursue reforms and the assistance will be linked to stipulated reform milestones, she said. Finance secretary TV Somanathan clarified this assistance will be a part of the Rs 1.3 lakh crore capex loans that the Centre has budgeted to extend to states in FY25. Key Points
Economic TimesIndia needs FDI reform to renew investor confidence now. Don’t wait till after 2024 election
These are not “normal times”. As countries focus on decoupling from China, and de-risking their supply chains, India should present itself as a new market for investors. Key Points
ThePrintInflationary pressure is not strong, despite weather, says Sanjeev Sanyal
Despite recent spikes in vegetable prices and rising consumer prices, the underlying inflationary pressure in India is not strong, according to Sanjeev Sanyal, a member of the economic advisory council to Prime Minister Narendra Modi. He stressed the importance of consolidating fundamentals before pushing for higher growth, referencing the moderating current account deficit and robust foreign exchange reserves. Key Points
Economic Times
If Modi wins, will bold economic reforms follow?
Finance Minister Nirmala Sitharaman, during the interim budget presentation, expressed confidence in Modi 3.0 becoming a reality, indicating that the same regime would present the full budget after the elections. With the potential re-election of the Narendra Modi government, questions arise about bold economic reforms. Suggestions include simplifying GST rates, implementing a three-rate system, and introducing a top-up tax mechanism for Indian MNCs. Key Points
Economic TimesFin sector, reforms may drive India's growth at 7 per cent in FY25, says government
Presented ahead of the interim budget for FY25, the review identified education, health and energy security; reducing the compliance burden for small businesses; and improving labour market gender balance as the priority areas for future reforms. It flagged the elevated risk of geopolitical conflicts as an area of concern. Key Points
Economic TimesChintan Shivir to focus on ensuring high growth rate
The finance and corporate affairs ministries plan to hold a two-day Chintan Shivir starting 20 August at Gujarat's Kevadia, which will comprise short and long-term measures to sustain growth rates, control inflation and tackle external challenges. Finance and corporate affairs minister Nirmala Sitharaman is expected to attend, while senior ministry officials will also be present. Key Points
Economic TimesChintan Shivir to cocus on ensuring high growth rate
The finance and corporate affairs ministries plan to hold a two-day Chintan Shivir starting 20 August at Gujarat's Kevadia, which will comprise short and long-term measures to sustain growth rates, control inflation and tackle external challenges. Finance and corporate affairs minister Nirmala Sitharaman is expected to attend, while senior ministry officials will also be present. Key Points
Economic TimesBudget 2024: Hand on the gear, getting ready to thrust ahead
The interim budget signifies a departure from sector-specific handouts, prioritizing fiscal consolidation with a lower-than-expected fiscal deficit. The focus remains on increased capital expenditure, innovation, and entrepreneurship support, green initiatives, tourism promotion, and ongoing reforms. The budget reflects a holistic approach to empower all sections of society for sustainable growth, creating a robust foundation for India's development. Key Points
Economic Times
'States' additional borrowings unlikely to hit yields on government securities'
The 10-year benchmark G-sec yield remained little changed at 7.06% on Wednesday. It has inched up from a 13-month low of 6.96% on May 16 but still remains about 40 basis points lower than a nearly four-month high on February 27. Key Points
Economic TimesShow outcome, get capex loan: Centre to states
Of the ₹1.3 trillion earmarked for the ‘special assistance to states for capital investment’ scheme, about ₹75,000 crore, will be linked to outcomes and reforms. Key Points
mintIndian govt earmarks Rs 1,43,332 crore worth incentives to 12 states for power sector reforms
The Indian government has provided financial incentives of Rs 1,43,332 crore to 12 states for power sector reforms. This includes Rs 66,413 crore as additional borrowing for reforms completed in 2021-22 and 2022-23. The incentives aim to improve efficiency and performance and will enable states to borrow additional funds. Specifically, states can borrow up to 0.5% of their Gross State Domestic Product annually from 2021-22 to 2024-25 if they implement specific power sector reforms. Key Points
Economic TimesFM Sitharaman lauds reforms under Modi govt, asks India Inc to ‘join in a big way’
Finance Minister Nirmala Sitharaman has urged the corporate sector to increase private capital expenditure and participate in India's economic growth. She emphasized the trust of global investors in India and called for greater joint venture partnerships. Sitharaman also emphasized the continuation of reforms, including digital infra, and emphasized the role of the Indian industry in aligning with national interests. Key Points
Economic TimesPredictions for 2024: A $4 trillion economy, creative philanthropy and boost in capital expenditure
ET asked a galaxy of experts to make one prediction each for 2024, the early part of which will be dominated by the general elections. But its also a year when the Indian economy is set to cross the $4 trillion mark. Not too surprisingly, in our 24 Predictions For 2024, the most dominant theme was the impact of Artificial Intelligence on businesses and lives, but Indias economic potential figured as strongly. Key Points
Economic Times
Russia's power will go down while China will become assertive, predicts CDS Gen Chauhan
Gen. Chauhan says military leadership is trying to give reforms certain speed in a particular direction. Warfare characteristics are changing because of new technologies, he adds. Key Points
ThePrintEBRD makes a case for multiple multilateral banks with diverse approaches
The European Bank for Reconstruction and Development (EBRD) said that different multilateral development banks (MDBs) are useful as they each have different perspectives and approaches that can complement each other, during the G20 finance ministers and central bank governors meeting. EBRD President Odile Renaud-Basso said deeper engagement with the Indian private sector is being sought and that the Indian government has recognised MDB reforms as a key area of focus. Key Points
Economic TimesCrisis-hit Sri Lanka to see economic contraction in 2023: Report
Sri Lanka's economy contracted by 7.8% in 2022. Key Points
mintThrust is on letting economy grow on its own momentum: CEA Anantha Nageswaran on next-gen reforms
India's fiscal deficit had shot up to 9.2% of GDP in FY21 following the additional spending to provide stimulus to the economy hit by Covid. The Chief Economic Adviser asserted that the latest target of 5.1% of GDP is realistic. Key Points
Economic TimesLet’s expand social security: Provident fund reforms are vital for India
A five-point agenda to fix the country’s PF scheme could shift 50 million people from informal to formal work. Let’s blend idealism with pragmatism. Key Points
mint
ADB’s capital adequacy reforms to increase annual commitment by 40%
Reforms to the capital adequacy framework by the Asian Development Bank (ADB) have increased its annual commitment capacity by 40%, unlocking an additional $100 billion for financing projects in the Asia Pacific region over the next decade. The ADB plans to leverage these funds along with private and domestic capital to address the climate crisis. Key Points
Economic TimesShould focus on structural reforms to sustain growth: RBI report
India has been an island of economic growth in a slowing global economy, but the focus should be on structural reforms to sustain that advantage, the Reserve Bank of India said in its annual report. Inflation is moderating and the external account is sound, but one threat to macro stability could be if the anticipated el nino manifests. Key Points
Economic TimesIMF's Gita Gopinath shares key reforms India needs for economic growth
Dr Gita Gopinath discussed various aspects of the economy and the steps the government can take to boost growth, particularly in light of the IMF's medium-term growth projection of around 6.5% for India. Key Points
India TodayFragile-five days long gone as funds pile into India, Indonesia
The original Fragile Five — which also included Turkey, South Africa and Brazil — referred to nations perceived to be most at risk due to their heavy reliance on foreign investment to drive growth. Improving finances — as reflected in credit-default swaps — show the markets view of India and Indonesia has swung almost 180 degrees since the term was coined in 2013. Key Points
Economic TimesViksit Bharat: Centre to provide Rs 75,000 crore interest-free loan to states
The Union government proposes a Rs 75,000 crore, 50-year interest-free loan to states for reforms supporting the vision of 'Viksit Bharat.' Finance Minister Nirmala Sitharaman announced this in the Budget speech, aiming for India to become a developed nation by 2047. The loan supports milestone-linked reforms in states, part of the government's approach to inclusive development, covering all castes and levels. The total resources transferred to states in 2024-25 stand at Rs 22,22,264 crore, a significant increase from the previous fiscal year. Key Points
Economic Times
Centre needs to extend policy focus beyond 'roti, kapda, makaan', says the office of CEA
As per the document, Indian witnessed a decline in inequality of consumption in the decade before the LPG reforms of 1991 due to regulatory distortions and state interference, while the rise in inequality after the 1991 reforms were an outcome of market incentives for entrepreneurship and innovation. The impact of Covid-19 on inequality has been transitory, with the public distribution system and rise in food subsidy substantially curbing a rise in distress levels, it said. Key Points
Economic TimesSri Lanka sees positive economic turnaround after bankruptcy
The year-on-year GDP growth rate for the third quarter has been reported as 1.6 per cent of positive growth rate, the Department of Census and Statistics (DCS) said in a press release on Friday. Key Points
Business TodayGolden Globes 2024 nominations announced: Here's everything you need to know about it
Golden Globes 2024 prepares for a comeback after reforms following a scandal. Nominations, announced by Cedric the Entertainer and Wilmer Valderrama, feature expanded categories like cinematic achievements and stand-up comedy. CBS hosts the awards, symbolizing a transformation from the troubled past. The Hollywood Foreign Press Association, now revamped with a more diverse 300-member voting body, aims for inclusivity. The event, historically a star-studded affair, faces a new chapter, emphasizing equitable representation in the industry. Key Points
Economic TimesIndia's experience in terms of manufacturing GDP growth different from rest of world: NITI Aayog member Ar
India's manufacturing GDP has followed a different trajectory compared to the rest of the world, according to NITI Aayog member Arvind Virmani. He emphasized the need for a competitive economy and highlighted the country's policy reforms in the past decade. Virmani also mentioned the importance of entrepreneurship, startups, and institutional reforms. The manufacturing sector currently accounts for around 17% of India's GDP. Virmani noted the government's role in providing public goods and ensuring a pro-competition market environment, while the private sector needs to compete, innovate, and invest. The focus is on creating more jobs for India's young workforce. Key Points
Economic Times88% MSME say GST reduced cost of goods and services, optimised supply chain
About 80% of the businesses say that the GST law requires additional reforms including removing Input tax credit restrictions and introducing an amnesty scheme, for resolving existing tax disputes that had tied up business capital and government revenue. Introduced in 2017, the law will complete six years on July 1. Key Points
Economic Times
India remains a globally attractive destination for investment due to structural reforms, says FM Sitharam
India's structural reform approach has allowed it to remain a globally attractive destination for investment and well-positioned in the global economy for steady acceleration in growth, according to Union Finance Minister Nirmala Sitharaman. She added that the approach made it possible for the country to remain resilient amidst tightening financial conditions and pandemic-induced economic setbacks, selecting a cautious route, which allowed them to implement structural reforms using a calibrated approach. Sitharaman noted that India is better placed now with muted spillover effects from stressed financial conditions in the West, and the INR remains stable relative to its counterparts. Key Points
Economic TimesPSU banks earned total profit of ₹70,167 crore in April-December FY23: Govt.
Minister of State for Finance Bhagwat K. Karad also said the NPA ratio of public sector banks has improved — declining from the peak of 14.6% in March 2018 to 5.53% in December 2022 Key Points
The Hindu