ECONOMIC GROWTH INDIA
Budget 2025: Why Nirmala Sitharaman needs to revamp priority sector lending and how it can drive growth
Budget 2025: The CII has recommended changes to India's lending policy for the 2025 budget. They want a review every 3-4 years. CII suggests including green energy and digital infrastructure. They also propose a bigger role for specialized financial institutions. This aims to support India's economic growth and innovation goals.
CII seeks reforms in India's priority sector lending framework
India's industry body, CII, recommends changes to the Priority Sector Lending policy. CII suggests adding new sectors like digital infrastructure and green initiatives. They also propose reviewing current allocations, given the changing economic landscape. Agriculture's share of GDP has decreased, while sectors like manufacturing show growth potential.
Rate cut would help in reviving economic growth without worsening the inflationary situation: MPC's Nagesh Kumar
RBI MPC member Dr. Nagesh Kumar advocated for a 25-basis point repo rate cut and a 50-basis point CRR reduction to stimulate economic growth without exacerbating inflation. He and Prof. Ram Singh dissented from the majority decision to hold the repo rate at 6.5% for the eleventh consecutive time due to inflation concerns.
Niti Aayog moots policy measures to develop workers¡¯ accommodation around factories
In its report ¡®Site Adjacent Factory Employee (S.A.F.E) Accommodation-Worker Housing for manufacturing growth¡¯ released on Thursday, the Aayog has proposed reclassification of land near manufacturing units as residential, providing viability gap funding to develop these projects in public-private-partnership (PPP) mode and GST exemption.
Investment push may spur GDP growth to 6.6% in FY26: Ind-Ra
India's economy is projected to grow by 6.4% in 2024-25 and 6.6% in 2025-26, fueled by investments. A cyclical slowdown observed in recent quarters is expected to reverse from the third quarter of 2024-25. Growth in 2025-26 will be led by investments outpacing consumption, with services exhibiting the strongest growth.
Private sector will continue to deploy capital, boost investments: CEA Nageswaran
India's Chief Economic Adviser, V Anantha Nageswaran, projected confidence in private sector investments driving GDP growth to 35% over the next five years. He reaffirmed the 6.5-7% real economic growth projection for the current fiscal year and emphasized the need to leverage domestic growth drivers amidst a challenging global landscape.
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Energy transition should be done without compromising growth, says CEA V Nageswaran
India's Chief Economic Advisor, V Anantha Nageswaran, stressed cautious energy transition to maintain economic growth and job creation. He highlighted the need to balance climate goals with economic realities, emphasizing job creation, skill development, and private sector investment for sustained growth.
No interest rate cut in RBI's Feb policy review, or anytime in FY26: Axis Bank's Mishra
Economist Neelkanth Mishra predicts no interest rate cuts by the Reserve Bank of India for the next 13-14 months due to elevated inflation. He anticipates 4.5% average inflation in FY26 and a 7% GDP growth. Mishra attributes the recent economic slowdown to unintended tightening by fiscal and monetary authorities but expects investment-led growth in the coming quarters.
New RBI governor Sanjay Malhotra warned of killing ¡®golden goose¡¯
Sanjay Malhotra, India¡¯s newly appointed central bank head, is a detail-oriented bureaucrat with a reputation for long hours and meticulous work. A 56-year-old Princeton-educated civil servant, Malhotra succeeds Shaktikanta Das as Governor of the Reserve Bank of India (RBI). His appointment, a surprise to many, was seen as a strategic move by Prime Minister Narendra Modi, favoring a low-profile, consensus-building leader.
Inflation-growth balance key task ahead for RBI: Shaktikanta Das
RBI Governor Shaktikanta Das emphasized balancing growth and inflation as his primary goal. He highlighted the strong rapport between the RBI and the government. Das concluded his term, handing over the reins to Sanjay Malhotra. India's inflation reached a 14-month high, prompting discussions of potential policy rate cuts.
Budget 2025 may take a conservative path, peg nominal growth at 9.5%
India's central government is considering a cautious 9.5% nominal GDP growth estimate for the 2025-26 budget, anticipating slower inflation but continued economic strength. This conservative approach aims to realistically manage fiscal targets. Factors like potential global commodity price moderation and easing energy prices contribute to this outlook, despite recent growth dips.
India to continue resilient growth in 2025, RBI may do modest interest rate easing: S&P
India's economy is expected to grow. S&P forecasts 6.8% growth this fiscal year and 6.9% next year. Strong urban consumption and infrastructure investment will drive growth. Inflation is expected to decrease. The RBI may ease monetary policy. The current fiscal year's second quarter growth was 5.4%. Several challenges remain, including weak household balance sheets and a competitive global manufacturing environment.
Revenue Secretary Sanjay Malhotra to be RBI Governor
Sanjay Malhotra, a 1990-batch IAS officer, has been appointed as the next RBI governor for a three-year term, succeeding Shaktikanta Das. He takes charge amid high inflation and slowing growth, facing the challenge of balancing economic recovery with price stability. Malhotra, currently revenue secretary, has a strong background in taxation reforms and financial services.
Union Budget 2025-26: CII urges Centre to stick to fiscal deficit target of 4.9% of GDP
The Confederation of Indian Industry (CII) has advised the Indian government against setting overly ambitious fiscal deficit targets for the upcoming financial year, warning that it could hinder economic growth. The CII recommends maintaining a 4.9% fiscal deficit target for 2024-25 and 4.5% for 2025-26.
Budget 2025: CII urges govt to stick to fiscal deficit target
The Confederation of Indian Industry (CII) advises the Indian government to maintain a fiscal deficit target of 4.9% of GDP for 2024-25 and 4.5% for 2025-26. They cautioned against overly ambitious targets, emphasizing the importance of fiscal prudence for sustained economic growth and suggesting measures like fiscal stability reporting and incentivizing states towards fiscal responsibility.
Why govt's chief economist is batting for your salary growth
India's economic advisor urged companies to increase wages as profits surge while worker pay stagnates. Declining real wages, coupled with inflation, are impacting urban consumption, contributing to slower economic growth and impacting corporate earnings. This wage-consumption-profit loop could become self-destructive if not addressed.
ADB approves $350 mn loan to enhance India's logistics and exports
The Asian Development Bank has approved a $350 million loan to bolster India's logistics sector. This funding supports government initiatives like the PM Gati Shakti plan and National Logistics Policy, aiming to modernize infrastructure, streamline processes, and integrate digital technologies. These improvements are expected to boost manufacturing competitiveness, create jobs, and promote economic growth.
Shaktikanta Das faces twin storms of Indian economy in his likely swan song policy
RBI MPC Policy: The Reserve Bank of India maintained its key interest rate and stance while lowering the cash reserve ratio to address liquidity issues and a challenging growth-inflation dynamic. The RBI lowered its GDP growth forecast for FY25 to 6.6% and raised its inflation projection to 4.8%, acknowledging economic headwinds while emphasizing India's overall stability and growth potential.
RBI MPC: Growth in second half to be better than Apr-Sep, says RBI Governor
RBI Governor Shaktikanta Das expressed confidence in improved growth during the latter half of the fiscal year, despite lowering the FY25 projection to 6.6%. This follows a 5.4% GDP growth in the second quarter, the lowest in seven quarters. Improved agricultural output and industrial recovery are expected to drive growth. Das emphasized the commitment to controlling inflation for sustainable growth.
CEA nudges private sector to hire more, says economic health pretty good
India's Chief Economic Advisor, V Anantha Nageswaran, urged private companies to increase hiring and balance capital-intensive growth with labor-intensive growth. He pointed out that while corporate profits are high, wage growth has lagged, potentially hindering demand. Nageswaran emphasized the importance of equitable income distribution for sustainable economic expansion and criticized large companies for delaying payments to smaller suppliers.
RBI to announce decision on key interest rate Friday morning
The RBI's monetary policy decision is due Friday morning. The central bank's committee met for three days. Experts predict no change to the repo rate. The CRR may be adjusted. RBI Governor Shaktikanta Das will announce the decision. This is Das's last MPC meeting of his current term.
Great Indian shopper goes silent while country may have two vicious circles to break
India's recent economic slowdown, marked by a 5.4% GDP growth last quarter, has raised concerns. Lower government spending and contracting urban wages are contributing factors. This slowdown, impacting the urban middle class, could have significant political and economic consequences if it continues.
RBI may explore other liquidity tools like open market operations (OMOs) and foreign exchange (FX) swaps instead of rate cut: Report
The Reserve Bank of India (RBI) is expected to hold policy rates steady in its current meeting, prioritizing liquidity management tools over a cash reserve ratio cut. Forecasting a potential rate cut in February 2025, the RBI is navigating a complex economic landscape marked by slowing growth, persistent inflation, and substantial foreign exchange losses amid global market volatility.
Will Shaktikanta Das deal with grim truths starting December 11?
RBI Governor Shaktikanta Das faces uncertainty about his future as his six-year term ends amid economic challenges. A slowing economy, persistent inflation, and controversies surrounding inflation calculations have fueled speculation about potential successors. Markets anxiously await the outcome of the MPC meeting and news of Das's possible extension.
Is India¡¯s food inflation being measured correctly? EAC-PM member Nilesh Shah weighs in
Nilesh Shah, managing director of Kotak Mutual Fund, raised critical concerns about the accurate measurement of food inflation in India, questioning whether the government¡¯s free food programs are reflected in official data. He also called for increased capital expenditure in the second half of the fiscal year, given the slower-than-expected growth. Shah noted the potential opportunities arising from global economic shifts, while urging the government to improve domestic ease of doing business.
India's economic slowdown: Which way are the gears shifting?
India's GDP growth slowed to 5.4% in July-September FY25, below RBI's 7% projection. Corporate earnings for top Indian companies showed the weakest growth in years. The Tata Group seeks to pursue growth despite uncertainties. Economists revised down their full-year growth estimates and flagged inflation and high-interest rates as major concerns.
India's fiscal deficit on track, but spending challenges persist: UBI report
The central government fiscal deficit for the first seven months of FY25 stands at 46.5% of its budget estimates, highlighting challenges in meeting the year's capital expenditure target. Capital expenditure fell by 14.7% during this period, impacting long-term economic growth, although there was a fiscal improvement in October 2024.
Rate cut is unlikely but RBI may signal it's ready to act
The Reserve Bank of India's Monetary Policy Committee is expected to focus on faltering economic growth rather than inflation during its December 4-6 meeting. Despite calls for lower interest rates, the RBI's commitment to controlling inflation and promoting financial stability may prevent a rate cut, even as growth targets face challenges.
RBI may continue status quo on interest rate, moderate GDP growth forecast: Experts
The RBI is expected to maintain the current benchmark interest rate due to high inflation exceeding the set limit. This decision will be announced on December 6, 2024. Experts believe rate cuts may only be possible in February if inflation decreases. Growth forecasts may also be revised due to disappointing GDP figures.
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