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Economy

This section offers content on things happening in the country. Any news update on India, its GDP, plans and levels globally will be included in this section.

February 8, 2024

Economy

Why are foreign investors pulling billions of dollars from China to invest in India?

India has become the hottest destination for foreign investors, beating China that’s struggling with a slowing economy and a crackdown on its tech sector. A survey by the think tank Official Monetary and Financial Institutions Forum (OMFIF) showed that India was the top choice for 40% of the 100 funds surveyed. At the same time, China got the support of less than a quarter of the managers.

The Numbers Game

Here are some of the reasons why foreign investors are moving their money from China to India:

Indian Stock Market Performance Increased by 2000% is Better

The stock markets are doing much better in India than in China. The MSCI China Index has given zero returns to investors since it started in October 1995. Still, the MSCI India Index has increased by a whopping 2,000%, and the MSCI Emerging Market Index has risen over 160%. China’s stock market has been hit hard by the government’s actions against some of its most prominent tech companies, like Alibaba, Tencent, and Didi, which have scared away investors and lowered their value.

India, on the other hand, has seen a surge in the share prices of its tech companies, such as like Reliance Industries, Infosys, and TCS, which have gained from the digital transformation and the increased demand for IT services during the pandemic.

Indian Economy’s Growing Faster

According to the International Monetary Fund (IMF), the Indian economy is growing faster than China. China’s GDP growth slowed down to 3.7% in 2020, the lowest in 44 years, but India’s GDP shrank by 5.9% and has bounce back strongly in 3 years and grown by 39.7% till 2023. Since 2021, China’s economy can be seen falling while India’s India’s GDP is showing an upward trend.

India’s recovery is driven by the easing of lockdown restrictions, the rollout of vaccines, and the government’s spending and lending measures. China’s recovery, however, is facing challenges from the comeback of COVID-19 cases, the tightening of credit conditions, and trade tensions with the US and other countries.

Indian Market Gives You More Control

The foreign direct investment (FDI) policy is more open in India than China. India has made it easier for foreign investors to invest in various sectors, such as defence, insurance, and retail. China has made it harder for foreign investors to invest in its market and has banned investments from countries that share a land border with it, such as India. This has affected the flow of FDI into China, which grew by only 4% in 2020, while India’s FDI rose by 13%, reaching $57 billion, the highest among the emerging markets. Most of the FDI into India went to companies active in the digital economy, such as Jio Platforms, Flipkart, and Zomato, which attracted investments from global giants like Facebook, Google, Walmart, and Tiger Global.

Politics is Bigger than We Think

Apart from the economies of the countries, geopolitics also plays a vital role in the change of dynamics:

India has a more stable and democratic political system than China, which reduces the risk of policy uncertainty and social unrest. India also has a more independent judiciary and a free press, which protect investors’ rights and interests, setting them in a state of ease and giving them a sense of control over their investments.

The demographic profile of India is more favourable than China, with a large and young population that provides a vast market and a skilled workforce that will stay intact for years. India also has a more diverse and vibrant culture, which fosters creativity and innovation. On the other hand, China’s population is growing older, and the decline in population growth makes the economy more vulnerable.

India has a more strategic and friendly relationship with the US and other major economies than China, which gives it access to trade and investment opportunities. India also has a more balanced and sustainable approach to development than China, which respects the environment and human rights.

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China is facing a significant backlash as the US has banned many big Chinese companies from conducting business in the US. As companies like Huawei Technologies and Jiangxi Hongdu Aviation Industry are not connected to one of the biggest markets in the world, it becomes difficult for investors to stay invested in such a volatile market.

India has become a more attractive destination for foreign investors than China because of better stock market performance, robust economic growth, and a more favorable FDI policy. This edge is likely to last in the coming years as India uses its demographics, innovation potential, and strategic partnerships to achieve its goal of becoming a $5 trillion economy by 2025.

How Will RBI’s Digital Currency Initiative Transform India’s Payment Landscape?

Have you heard of the digital rupee? It’s a new kind of money that the Reserve Bank of India (RBI) is testing out. It’s not like the paper notes and coins that we use every day. It’s also not like the cryptocurrencies you may have heard of, like Bitcoin or Ethereum. It’s a currency of its own kind.

What is Digital Rupee?
The digital rupee is the Indian rupee that went digital. It’s like having money in your phone or device instead of your wallet or bank account. You can use it to buy things and pay for services, just like you do with cash or cards. You can also send it to anyone, anywhere, anytime, without any hassle or fees. It quite literally works in the form of exchanging notes like we are used to doing, but instead of notes being made of paper, they are completely digital.

Types of Digital Rupee
The digital rupee has two forms: one for big transactions, like interbank settlements, and one for small transactions, like consumer and business payments. The one for small transactions is called the retail digital rupee (e₹-R), and that’s the one we are going to focus on, as that concerns us, the layman.

How does the Retail Digital Rupee (e₹-R) work?
The e₹-R can be accessed through a digital wallet offered by participating banks. You can store it on your phone or other smart device and use it to make payments through person-to-person (P2P) or person-to-merchant (P2M) modes, using QR codes or other methods. The e₹-R does not make any interest and can be converted to other forms of money, such as bank deposits. In a nutshell, we are replacing our physical tokens with digital versions of the same, which saves a lot of money and resources on printing, distributing, and managing physical currency, which costs ₹49,84 Crores.

Inclusion of all economic classes

Despite so much digital advancement, 89 percent of transactions in India are made through cash. It’s not because people are apprehensive of digital methods of transaction. They are unable to access these methods for various reasons:

A 10th of India’s population lives below the poverty line, and earning daily wages is a challenge, so maintaining a bank account becomes pretty much impossible.
About 190 Million Indians don’t have access to a bank account, and one of the most common reasons for this is that the majority of India stays in rural areas, and access to banks is scarce for them.
Elderly people have a hard time coping with digital advancements in transactions and hence prefer to stick to the old method of exchanging notes.

Bridging the gap

As India grows and digitally progresses, this section of the population is being left behind as it lacks the access to the digital world due to their limited their ability to make transactions, the digital rupee fixes that, here are some examples:

With advancements in technology, education has become cheaper, but only for people who can pay the fee of the digital educational platform, and the digital rupee enables a person with a lack of bank account to just pay with their tokens online and access it.
A new start-up in India makes high-quality goods cheaper and more accessible to the people of India. Still, due to the nature of their business, they only accept advance payment through online mediums. Now, people who don’t have a bank account can still access these options.
As the payment method becomes traceable, the unfair pay of wages to workers can be addressed because the authorities can see if a person is being paid below the minimum wage mark.

These were just a few examples. The digital rupee can help a huge segment of India to reach better heights.

Challenges RBI May Face

The ambitious and innovative project is a step towards realizing the vision of a ‘less cash and more digital India,’ where everyone can access and benefit from the digital payment ecosystem. However, RBI is up for a challenge to fit the digital currency in the current landscape:

Requires a clear and comprehensive legal and regulatory framework to define its status, scope, and functions. And will have to comply with the existing laws and regulations.
Needs a robust and secure technological design and architecture to ensure its functionality, interoperability, scalability, cyber security, data protection, and system resilience.
Must gain the trust and confidence of consumers and businesses, who may be unfamiliar or reluctant to use a new form of money.
May affect the money supply, interest rates, inflation, exchange rates, and credit creation, and thus the country’s monetary policy and financial stability.

The RBI understands these concerns, and that is why the currency is still being tested, while feedback and suggestions from the public and stakeholders are welcomed.

February 2, 2024

Economy

Interim Budget 2024: 6 Key Insights To Know

The Union budget for 2024-25 was an interim budget on account of the general election schedule in April-May’24. As expected, being an interim budget, there were no significant policy changes. No changes in direct or indirect taxes were proposed.

The budget aligned with the path of fiscal consolidation and macroeconomic stability as guided in the 2021-22 budget. It also saw a lower-than-expected increase in capital expenditure, helping reduce the fiscal deficit and facilitate higher credit availability for the private sector. The capex outlay saw a tilt towards the states as they got a larger share. Most announcements were in the railways, energy, housing, and healthcare sectors.

Top takeaways from the budget

The budget outlined the need to focus on the Poor, Women, Youth, and farmers, as their empowerment and well-being will drive the country forward. The next five years are expected to be unprecedented in development, helping India progress and realize the dream of a developed India by 2047. The trinity of Democracy, Democracy, and Diversity backed by everyone’s efforts will be key in fulfilling the aspirations.
Capital expenditure for FY25 is estimated at Rs. 11.1 lakh crore, a jump of 11.1% from last year’s budgeted estimate of Rs. 10 Lakh Crore. This is 3.4% of GDP, higher than last year at 3.3%.
FY24 fiscal deficit estimate was lowered to 5.8% from 5.9% budgeted earlier. For FY25, the fiscal deficit is expected to drop to 5.1% on account of slower growth in capex and sustained growth in tax and non-tax revenues. This is in line with the aim to reach a fiscal deficit of 4.5% in FY26. On the non-tax revenue front, divestment of Rs. 50,000 Cr. is expected in FY25 Vs. the revised estimate of Rs. 30,000 Cr. for FY24.
Three major economic railway corridor programs will be implemented: energy, mineral, and cement corridors, port connectivity corridors, and high-traffic density corridors. This will accelerate GDP growth, reduce logistic costs along with decongestion, and improve the operations of passenger trains.
Through rooftop solarization, one crore households will get up to 300 units of free electricity every month. This will bring in savings of Rs. 15,000-18,000 annually, entrepreneurship opportunities for vendors, and employment opportunities for youth.
A corpus of Rs. 1 Lakh Crore will provide long-term financing or refinancing with long tenor at low or nil interest rates and encourage the private sector to scale up research and innovation in sunrise domains.

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SIP CALCULATOR | RETIREMENT CALCULATOR | CAGR CALCULATOR | FINANCIAL CALCULATORS

INCOME (Rs. lakh Cr.)	FY24 BE	FY24 RE	FY25E BE	Growth
Net Tax Revenue	23.3	23.2	26.0	12%
Non-Tax Revenue	3.0	3.8	4.0	6.4%
Recovery of Loans	0.2	0.3	0.3	11.5%
Disinvestment	0.6	0.3	0.5	66.7%
Total Income (B)	27.2	27.6	30.8	11.8%
EXPENDITURE (Rs. lakh Cr.)
Revenue Expenditure	35.0	35.4	36.5	3.2%
Capital Expenditure	10.0	9.5	11.1	16.9%
Total Expenditure (A)	45.0	44.9	47.7	6.1%
Fiscal Deficit (A-B)	17.9	17.3	16.9	-2.8%
Fiscal Deficit as a % of GDP	5.9%	5.8%	5.1%
Nominal GDP	302	297	328	10.5%
Nominal GDP growth (%)	10.5%	8.9%	10.5%

*A: Actual BE: Budget Estimates RE: Revised Estimates

BFSI

Announcement	Impact
‘Direct Benefit Transfer’ of Rs. 34 lakh crore from the Government using PM-Jan Dhan accounts has led to savings of Rs. 2.7 lakh crore for the Government.	To benefit MFIs and SFBs who lend to people at the bottom of the pyramid.
Gross borrowing of Rs. 14.1 trn and net borrowing of Rs. 11.8 trn announced.	This is better than expectations and bond yields have reacted positively to this announcement. Likely to benefit Banks and NBFCs and PSU Banks in particular.
83 lakh SHGs with 9cr women are transforming the rural socio-economic landscape. Their success has assisted nearly 1cr women to become Lakhpati Didi already. It has been decided to enhance the target for Lakhpati Didi from 2 crore to 3 crore.	To benefit MFI’s and SFBs who lend to people at the bottom of the pyramid.

Infrastructure

Announcement	Impact
MoRTH budget allocation remained flat at Rs. 2.78 lakh cr v/s Rs. 2.70 lakh cr FY24BE.	Neutral impact for road EPC construction companies
Implementation of PM Awas Yojana (Grameen) continued despite COVID-19, and the government is close to achieving the target of 3cr houses. 2cr more houses will be taken up in the next 5 years to meet the requirement arising from an increase in the number of families.	Positive for EPC, Building material players such as Paints, Pipes, FMEG and affordable HFCs
Metro Rail and NaMo Bharat can be the catalyst for urban transformation. Expansion of these systems will be supported in large cities focusing on transit-oriented development.	To benefit infrastructure and related entities
Continuation of a 50-year interest-free loan to States with capital outlay worth Rs. 1.3 lakh cr	This will benefit infrastructure companies dependent on state capex
Railway budget outlay increased to Rs. 2.55 lakh cr. vis-à-vis Rs 2.4 lakh cr. In FY24 BE.	To benefit railway-focused companies.
40,000 Railway bogies to be converted to Vande-Bharat Standards.	Positive for domestic Railway coach manufacturers and players in the railways component eco-system.
Focusing on developing 3 Rail corridors: 1) Cement, Mineral, and Energy, 2) Port connectivity, and 3) High Traffic Density corridor.	Positive for domestic Railway-focused companies and players in the last mile logistics. This will lead to an improved share of Railways in the transportation of Goods within the country.

Agri and Food Processing

Announcement	Impact
Fertilizers subsidy for FY25 reduced by ~13% to Rs. 1.64 lakh cr over RE FY24. In FY24, the government had budgeted ~Rs 1.75 lakh crore but raised allocation, and revised estimates were ~Rs 1.88 lakh crore.	Negative for Fertilizer companies.
Increased usage of Nano-DAP to be expanded in all Agro-climatic zones.	Positive impact on the fertilizer stocks that are in the manufacturing of Nano-DAP.
A comprehensive program for supporting dairy farmers will be formulated, built on the success of existing schemes.	Improve dairy sector productivity and benefit the entire dairy value chain. Positive for the Dairy sector
Strategy to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower. This will cover research for high-yielding varieties, widespread adoption of modern farming techniques, market linkages, procurement, value addition, and crop insurance.	Initiatives to improve the production and processing of oilseeds will help reduce dependency on imports. Positive for Agri and FMCG sectors.
Pradhan Mantri Matsya Sampada Yojana (PMMSY) to be stepped up – This will enhance aquaculture productivity from existing 3 to 5 tons per hectare, double exports to Rs. 1 lakh cr. and generate 55L employment opportunities. Five integrated aquaparks will be set up. Increased allocation for Blue Revolution to Rs.2.3k crore in FY25 (BE) vs Rs.1.5k cr in FY24 (RE)	Positive for the fisheries and aquaculture sector
Increased allocation for PM-Formalisation of Micro Food Processing Enterprises scheme to Rs.880cr vs Rs.800cr (FY24 RE). Allocation in FY24 (BE) was Rs.639cr.	Positive as it reduces post-harvest losses and enhances productivity and incomes.

Auto Sector

Announcement	Impact
Payment security mechanisms will encourage the adoption of e-buses for public transport networks.	Positive for auto OEMs manufacturing E-buses and some auto-ancillary companies.
Expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure.	Positive for players in the EV ecosystem, including those involved in the charging infrastructure.
FAME subsidy expenditure for FY25 was reduced by ~44% to ~Rs. 26.7 bn from ~Rs 48 bn in FY24 (BE).	Negative for EV OEMs, the reduction is mainly due to the reduction in the E-2W subsidy announced in May’23. This might delay the penetration of EVs.

Travel and Hospitality

Announcement	Impact
Projects for port connectivity, tourism infrastructure, and amenities will be taken up in islands, including Lakshadweep. States will be encouraged to undertake the development of iconic tourist centres to attract business and promote opportunities for local entrepreneurship. Long-term interest free loans to be provided to States to encourage development.	Favorable and will facilitate convenience in domestic travel. Positive for hotel, aviation, and travel hospitality related sectors.
Expansion of existing airports and development of new airports will continue expeditiously under the UDAN scheme.

Defence Sector

Announcement	Impact
Defence sector outlay was at Rs. 6.2 lakh cr. for FY25 (from Rs. 5.94 lakh cr. in FY24)	While the defence sector received the highest sectoral allocation this year, the allocation increased by only 4.4% YoY in FY25, much less than last year’s growth of 13% YoY. Positive for the sector.
New scheme for strengthening deep-tech technologies for defence and expediting Atmanirbharta to be launched.	The scheme aligns with the government’s push towards bolstering Atmanirbharta in defence by fostering advancements in building cutting-edge technologies that hold immense potential for boosting indigenous defence capabilities and enhancing national security.

Healthcare and Well-being

Announcement	Impact
Allocation towards Health and Family Welfare saw a marginal 1.7% increase to Rs. 90,659 cr.	Allocation was less and reflects low priority in the current budget.
Jan Aushadhi Scheme allocation increased significantly from Rs. 115 cr. in FY24 to Rs. 284 cr. in FY25.	Reiterates the government’s continued focus on increasing cost-effective generic drug sales. Positive for companies with generics drug portfolio.
Plans to set up more medical colleges by utilizing existing hospital infrastructure. A committee will be formed to evaluate the matter.	It will aid in improving India’s healthcare services and address the concerns around shortages of skilled healthcare workforce.
U-WIN platform for immunization efforts of Mission Indradhanush to be rolled out	U-WIN, a one-stop digital platform apart from maintaining an electronic registry of vaccinations and immunization programs, will also result in timely vaccine administration by sending alerts and better management of vaccine distribution.
Encourage Cervical Cancer Vaccination for girls (9-14 years) for prevention.	In India, cervical cancer is the second-most common cancer among women, and India accounts for nearly a quarter of all cervical cancer deaths in the world. This announcement is positive as it will help in tackling the rising cases.
Ayushman Bharat will cover all workers under the ASHA and Anganwadi schemes.	Ayushman Bharat, the largest publicly funded health insurance scheme in the world, continues to benefit vulnerable sections of the country with its comprehensive coverage.
All maternal and child healthcare schemes will be brought under one comprehensive scheme. Improve nutrition delivery, early childcare, and development.	Positive for OTC players and companies focusing on maternal / child segments.

PLI Updates

Announcement	Impact
PLI for White goods (AC and LED Lights) has increased 4 folds to Rs. 3 bn from Rs 650 mn BE FY24.	Beneficial for the AC manufacturing companies who have received PLI scheme approval from the government.
PLI for Large-Scale electronics has increased by 36.4% YoY to Rs. 61bn from Rs. 44 bn in FY24.	This is positive for players who are into manufacturing large-scale electronic products, given they are approved for the PLI incentive scheme.
PLI for IT hardware has increased by 6.5% YoY to ~Rs 750 mn from Rs. 704 mn RE FY24.	This would benefit EMS players manufacturing Laptops, Tablets, and other IT hardware devices.
Auto PLI has been allocated Rs 35 bn, a more than 7x increase YoY from FY24 BE of Rs. 4.8 bn.	Positive for the Auto OEMs as well as for auto ancillaries.
Battery PLI has been allocated ~Rs 2.5 Bn vs Rs 0.1 bn in BE FY24.	Beneficial for battery makers. Currently, capacities are being set up and will ramp up across FY25; hence, allocation is slightly lower.
Modified program for the development of semiconductors and display manufacturing. Budget allocation has increased to ~Rs. 65 bn vs Rs. 15 bn in FY24.	This would be beneficial for EMS players engaged in manufacturing semiconductors.
Pharma PLI budget estimates almost doubled to Rs. 21 bn in FY25 from Rs. 12 bn budgeted in FY24.	Positive for Indian Pharma Companies.
PLI Scheme for the Food Processing Industry has increased 26% to Rs.1,444cr from Rs.1,150cr (FY24 RE)	Positive for enhancing the food processing sector

Miscellaneous

Announcement	Impact
A coal gasification and liquefaction capacity of 100 MT will be set up by 2030. This will help reduce imports of natural gas, methanol, and ammonia.	Positive for companies setting up plants for coal gasification
Research & Innovation: A Corpus of rupees one lakh crore will be established with a 50-year interest-free loan. It will provide long-term financing or refinancing with long tenors and low or nil interest rates.	The aim is to encourage the private sector to significantly scale up research and innovation in sunrise domains. The funding will strengthen R&D and aid in improving India’s position globally as a technology leader.
Allocation to Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) flat in FY25 (BE) at 86k cr. The original allocation in FY24 (BE) was 60k cr.	Positive
Tax incentives and exemptions for start-ups and investments by sovereign wealth or pension funds are extended for one year.	Positive
Withdrawal of outstanding direct tax demand: Up to Rs. 25,000 pertaining up to FY10Up to Rs. 10,000 for FY11-FY15	Positive and expected to benefit ~1 cr. taxpayers
Renewable Energy 1 crore households can obtain up to 300 units of free electricity per month. The total outlay for this is expected to be around ~Rs 100 bn.	Beneficial for players in the solar ecosystems.
Viability gap funding for offshore wind energy up to 1GW capacity.	Positive for the wind energy players, the turbine manufacturing space, EPC space, etc.
Mandating Compressed Biogas (CBG) blending with CNG and PNG in a phased manner to reduce imports of LNG.	This would have a neutral impact on City Gas Distribution companies.

January 15, 2024

Economy

Gujarat Global Summit 2024: 10 Announcements To Know

The Vibrant Gujarat Global Summit 2024, which commenced on January 10 and ended on the 12th, emerged as a transformative event for India. It witnessed active participation from global business leaders, setting the stage for economic growth, investments, and international partnerships.

This summit was a critical platform to showcase Gujarat as a premier investment hub. Prime Minister Modi’s direct involvement underscores the state’s pivotal role in the nation’s overall development. The spotlight shone on India’s two wealthiest businessmen, Gautam Adani, and Mukesh Ambani, as they took center stage during the summit with announcements that could redefine Gujarat’s economic landscape.

Top 10 Announcements at the Gujarat Global Summit

Adani’s $24 Billion Investment: Gautam Adani pledged a staggering $24 billion over the next five years, not merely as an investment but as a commitment to creating 1 lakh jobs in Gujarat, significantly impacting the state’s employment landscape.
Green Energy Revolution: Adani Groups committed around $100 billion towards transitioning to green energy over the next decade, signaling a transformative shift in India’s energy ecosystem. This move aligns with global environmental goals and positions India as a leader in sustainable practices.

Carbon Fibre Facility: Mukesh Ambani’s announcement about India’s first world-class carbon fiber facility at Hazira, Gujarat, marks a pioneering step toward enhancing India’s manufacturing capabilities in advanced materials.
Green Energy Giga Complex: The plan to establish a green energy giga complex on a sprawling 5,000-acre site in Jamnagar by 2024 reflects Reliance Industries’ commitment to sustainability and signifies a substantial contribution to India’s clean energy goals.

Semiconductor Fab in Dholera: N Chandrasekaran’s revelation about building a semiconductor fab in Gujarat’s Dholera, operational by 2024, underscores the state’s leap into advanced technology manufacturing.
Lithium-Ion Storage Battery Factory: Tata Group’s ambitious plan to construct a massive 20-gigawatt lithium-ion storage battery factory in Sanand within the next two months positions Gujarat as a critical player in the electric vehicle revolution.

Suzuki’s Expansion: Toshihiro Suzuki announced a ₹35,000 crore investment for Suzuki’s second manufacturing facility in Gujarat, which will contribute to the state’s economic growth and align with India’s automotive sector expansion plans.
Dutch, Singaporean, and Tech Investments: The Dutch and Singaporean firms and Nvidia’s partner firm Yotta’s plan to commission an “artificial intelligence data center” in GIFT City announced investments exceeding $7 billion.

World’s Largest Steel Manufacturing Factory: Lakshmi Mittal’s revelation about building the world’s single biggest steel manufacturing factory at Hazira in Gujarat by 2029, with a capacity of 24 million tonnes per annum, could position Gujarat as a hub for heavy industries.

India’s Global Standing: India is poised to be among the top three economies globally, promising significant investments and strategic partnerships that could aid India’s ascent on the global economic stage

Also Read: Top Semiconductor Stocks in India

Summit Achievements

Record-breaking MoUs: MoUs exemplify the summit’s achievements for investments exceeding INR 45 lakh crores across 98,540 projects, marking a historic milestone for Gujarat and solidifying its position as an investment destination.
Global Participation: With 34 partner countries and 16 partner organizations actively engaged, the summit attracted global attention and fostered international collaboration, further elevating Gujarat’s global standing.
Bilateral Talks: Prime Minister Modi’s bilateral discussions with vital global figures, including executives from Suzuki Motor Corp, AP Moller, Micron Technology, and others, highlight the summit’s role in fostering international cooperation and strategic partnerships.
A Decade of Growth: The Vibrant Gujarat Global Summit 2024, overcoming the challenges of the previous year, has not only surpassed the achievements of the 2022 edition but has also set a new benchmark with 41,299 projects worth INR 26.33 lakh crores signed, showcasing Gujarat’s resilience and commitment to sustained growth.
Green Hydrogen Mission: Member of NITI Aayog, Shri V. K. Saraswat, shed light on the ‘Mission Green Hydrogen,’ aiming to produce five million metric tons of green hydrogen in India by 2030. Gujarat’s expected significant contribution aligns with the state’s commitment to sustainable practices.
International Collaboration: The signing of five MoUs between the Gujarat government and the UK, fostering strategic cyber cooperation and technology collaboration, strengthens the state’s cybersecurity infrastructure, positioning it at the forefront of technological advancements.

In conclusion, the Vibrant Gujarat Global Summit 2024 was a testament to India’s resilience and determination for economic progress. The active participation of global business leaders has laid the foundation for a prosperous and sustainable future.

FAQs

How will Adani’s $24 billion investment impact Gujarat’s employment?
Adani’s investment is not just monetary; it’s a commitment to creating 1 lakh jobs in Gujarat, significantly boosting the state’s employment landscape.
What is the significance of the green energy commitments made by Adani Groups and Reliance Industries?
These commitments mark a transformative shift towards sustainable energy practices, aligning with global environmental goals and positioning India as a leader in green initiatives.
How does the summit contribute to India’s global standing?
With its record-breaking investments and international collaborations, the Gujarat Global summit reinforces India’s position as a key player in the global economic landscape.
What are the key areas of collaboration in the MoUs signed during the summit?
The MoUs cover diverse areas, including technology, green energy, steel manufacturing, and cyber cooperation, fostering comprehensive development.
How does Gujarat plan to contribute to the ‘Mission Green Hydrogen’?
Gujarat is expected to significantly produce five million metric tons of green hydrogen by 2030 under the ‘Mission Green Hydrogen.

December 21, 2023

Economy

Discover 8 Sustainable Steps for Successful Green Business Investment

In the dynamic landscape of modern business, the concept of Green Business has gained significant traction. As environmental concerns continue escalating, investors and individuals focus on sustainable and eco-friendly practices. There is an increasing demand for environmentally friendly practices, and companies are adapting to meet these expectations.

Everyday business activities can significantly impact the environment, positively or negatively. We don’t consciously understand this and don’t know how it works and affects our daily lives. The local environmental and social impacts are enormous.

The world is slowly moving towards more environmentally friendly and sustainable practices. Companies are also beginning to recognize the importance of a sustainable business strategy and incorporate that into their business processes. Many green, ethical companies strive to minimize their impact on the local environment.

Many government regulations come to protect natural resources and preserve the environment. For example, companies must comply with the rules to safeguard the environment before building manufacturing plants, factories, or factories in green areas.

This comprehensive guide will help you explore the basics of green business, highlighting examples, potential investments, and sustainable business models. Whether you’re an investor looking for ethical opportunities or an individual looking to make a positive impact, this guide offers seven critical steps to a successful green business journey.

Also Read: Exploring Socially Responsible Investment

Need For Green Businesses

Aspect	Description
Definition	Business practices that prioritize environmental sustainability, social responsibility, and economic viability.
Environmental Impact	Reduces carbon footprint, minimizes waste, conserves resources, and promotes biodiversity.
Economic Benefits	It enhances operational efficiency, reduces long-term costs, attracts environmentally conscious consumers, and opens new market opportunities.
Social Responsibility	Demonstrates commitment to ethical practices, improves brand image, and contributes to community well-being.
Regulatory Compliance	Adhering to environmental regulations mitigates legal risks and ensures long-term business continuity.
Innovation and Technology	Encourages the development of sustainable technologies, fostering innovation and creating a competitive advantage.
Employee Engagement	Attracts and retains top talent as employees increasingly seek socially responsible workplaces.
Consumer Demand	Growing consumer preference for eco-friendly products and services drives market demand for green businesses.
Global Environmental Challenges	Addresses critical issues like climate change, pollution, and resource depletion on a global scale.

Understanding Green Business

Green business describes a company that does not negatively impact the environment, economy, or community. It makes its products from sustainable materials. It aims to use as little water, energy, and raw materials as possible while reducing carbon emissions or explores ways to use these resources in innovative ways that are not as environmentally friendly as installing solar panels.

The Green Investment Landscape

Prime Minister Narendra Modi has also highlighted the economic opportunities in areas like green hydrogen ecosystem, auto scrapping, and energy conversion, such as green initiatives by the Government of India to increase renewable energy, reduce fossil fuel consumption, and move the country towards a gas-dependent economy.

Some initiatives by the government are:

National Solar Project (MNRE)
Advanced National Energy Efficiency Program (under Ministry of Power).
Sustainable Global Environmental Policy (under the Ministry of Housing and Urban Development)
Global Water Project (MWR)
Green Business Plan
National Green Hydrogen Mission

Setting up Green Business in India

Research and Design: Know your green business idea. Identify the type of green business you want to set up. This could be renewable energy, waste management, environmentally friendly practices, sustainable agriculture, etc.
Market Analysis: Analyze market demand, competition, and potential customers for your green business.
Business Plan: Develop a comprehensive business plan outlining your objectives, target markets, financial projections, and sustainability initiatives.
Legal Framework and Records: Choose a business structure. Decide on the legal structure of your business, such as a sole proprietorship, partnership, limited liability company (LLC), or sole proprietorship.
Register your business: Register with India’s Ministry of Corporations (MCA). Get a Unique Number (UIN) or Company Number (CIN).
Rules of Compliance:
- Environmental clearance: Depending on the nature of your green business, you may need an environmental permit from the relevant authorities. Contact the National Pollution Control Board for guidance.
- Obtain permits and licenses: Identify and obtain the specific permits or licenses for your green business. This can include permits and licenses for specific projects.
Taxation and Finance:
- Tax registration: If your annual income is above the border limit, register for Goods and Services Tax (GST).
- Financial management: Establish a financial plan, including a professional bank account, and maintain proper financial records.
Funding and support:
- Research government policies: Research and ask for government policies or grants supporting green businesses in India.
- Find investors: Find potential investors, investors, or green financing options to finance your business.
Resources and Technology:
- Technology and Equipment: Invest in environmentally friendly technology and equipment that aligns with your green business goals.
- Resource Management: Plan your work schedule to minimize environmental impact and maximize energy efficiency.

Exploring Green Business Models

There have been various sustainable business models that have proven successful. From circular economies to zero-waste strategies, one such brand example is IKEA. It opened its doors in India a few years ago and is spread worldwide. As a leading brand focused on renewable energy and sustainability, IKEA has developed a “Good for People and the Planet” program that promotes environmentally friendly practices and solar power and encourages renewable environmental efforts.

IKEA is also an example of a company working towards 100% renewable energy in stores and reducing its already low percentage of waste from the current 15%.

The imperative to meet the challenges of climate change led to a paradigm shift towards adopting sustainable consumption and production practices, ultimately benefiting consumer well-being. It is important to consider market development and responsibility for resource consumption. Business owners should prioritize resource efficiency, expanding their commitment beyond the construction sector to promote the country’s Sustainable Development Goals (SDGs).

As we conclude our journey to green business, it is clear that the future lies in sustainable practices. Incorporating these steps into your investment or lifestyle choices contributes to a greener and more ethical world. Embrace green business opportunities and be part of the positive change our planet needs.

FAQs

What is the primary focus of green business?
Green businesses focus on adopting environmentally friendly practices to minimize negative impacts on the planet while promoting sustainability.
Are there successful examples of companies embracing green business models?
Yes, many companies, including major corporations, have successfully implemented green business models, showcasing the feasibility and benefits of sustainable practices.
How can individuals contribute to green business without direct investments?
Individuals can contribute by making sustainable choices in their daily lives, supporting eco-friendly products, and raising awareness about the importance of green practices.
What is the significance of investing in green business?
Investing in Green Business supports environmental sustainability and can lead to long-term financial gains. Companies adopting eco-friendly practices are often more resilient and future-proof.

October 19, 2023

Economy

Understanding Aadhaar PAN Linking Penalty Charges

Introduction

In today’s digital age, linking your Aadhaar card with your PAN card has become essential for financial transactions and tax compliance. However, many individuals are unaware of the associated fees and late fees that they may incur. In this article, we will analyze Aadhaar PAN linking charges, highlight late fees of Rs 1,000, and discuss the additional costs that may arise if you opt for the offline route.

Section 139AA of the Income Tax Act provides that every person with a Permanent Account Number (PAN) issued on 1st July 2017 and eligible for an Aadhaar Number shall declare his Aadhaar Number in the prescribed manner and form.

If you have not linked it with Aadhaar by June 30, later extended to 30th July 2023, your PAN will not be valid. However, people falling within the exempted category will not be affected by the invalidity of PAN.

Aadhaar-PAN Linking Charges Explained

The Aadhaar-PAN linking process was introduced to streamline financial transactions and curb tax evasion. While linking these two vital identification documents is mandatory, it’s essential to understand the charges involved:

Online Aadhaar-PAN Linkage:

Linking Aadhaar card with your PAN card online is the easiest and most cost-effective method.
This process has no fee, making it a hassle-free option for individuals who want to comply with tax laws.

Offline Aadhaar-PAN Link:

Using an offline method to link your Aadhaar and PAN cards may incur additional fees.
The most important cost associated with offline linking is the latency fee, which is Rs 1,000. If you miss the deadline to combine these two forms, this fee will be charged. Your PAN card might have become inoperative if you did not link it with Aadhaar till 30 July 2023.

Additional Costs for Offline Linking:

Apart from late fees, there may be other costs when linking Aadhaar and PAN offline.
These additional fees may include visiting an Aadhaar enrollment center or a PAN activation center.
Travel costs, photo reimbursement, and application fees may vary depending on the service.

Understanding Late Fees

The Rs 1,000 late fee is a major deterrent for individuals who miss the deadline for linking their Aadhaar and PAN cards. To avoid this penalty, it’s important to know the deadline and complete the negotiation process promptly.

Why is Aadhaar and PAN card Linking Important?

Tax Compliance: One of the main reasons for integrating Aadhaar and PAN is to enhance tax compliance. By linking their Aadhaar and PAN cards, individuals will find it easier for the government to monitor financial transactions and detect tax evasion. It helps reduce tax fraud and increases tax revenue for the government.

Prevention of multiple PANs: Linking of Aadhaar with PAN helps identify persons holding multiple PAN cards in an attempt to evade paying taxes or engage in other illegal financial activities This ensures that everyone has only one valid PAN, which is necessary for accurate taxation.

Simplify Financial Transactions: Combining Aadhaar with PAN can simplify various financial transactions, such as opening a bank account, applying for a loan, or other transactions. It helps identify individuals quickly and accurately, reducing the possibility of fraudulent activities.

Establishment of Government Benefits: Aadhaar-PAN linkage can help the government distribute targeted subsidies and welfare benefits. It ensures that benefits are delivered to the rightful beneficiaries and reduces the likelihood of resources being misappropriated or misused.

Reducing Identity Theft: Linking Aadhaar with PAN can help reduce identity theft and financial fraud. Verifying the authenticity of an individual through biometric and demographic information stored in the Aadhaar database adds an extra layer of security.

Streamlining Tax Filing: Integrating Aadhaar and PAN can make it easier for individuals to file their income tax returns online. It simplifies the verification and certification process, and reduces the possibility of errors in tax returns.

Compliance with Legal Requirements: The government of India has made it mandatory for individuals to join Aadhaar and PAN as per the Income Tax Act. Failure to comply may result in fines or difficulty in conducting financial transactions.

Here’s a step-by-step guide on how to link your PAN with Aadhaar online:

Step 1: Visit the official income tax website.

Step 2: Click on the ‘Link Aadhaar’ option.

Step 3: Enter your PAN, Aadhaar number, name as per Aadhaar, and other required details.

Step 4: Verify the captcha code and click ‘Link Aadhaar.’

Step 5: A confirmation message will be displayed, indicating successful linkage.

By following these simple steps, you can ensure that your PAN and Aadhaar are linked without incurring any fees.

Linking the Aadhaar card with your PAN card is a must to ensure seamless financial transactions and tax compliance. While online transactions are free and convenient, taking the offline route can incur a hefty late fee of Rs 1,000 if the deadline is missed.

Apart from that, internet can communication incur additional costs, such as travel expenses and application fees. It is advisable to complete the Aadhaar PAN linking process online within the stipulated time to avoid unnecessary fees and penalties.

FAQs

What is the late fee for missing the Aadhaar-PAN linking deadline?
The late fee for missing the Aadhaar-PAN linking deadline is Rs 1,000.
What additional expenses can be incurred when linking Aadhaar with PAN offline?
When linking Aadhaar with PAN offline, individuals may incur expenses such as travel costs to the service center, photocopying fees, application processing charges, and the Rs 1,000 late fee if the deadline is missed.
Is my personal information safe when I link Aadhar and PAN?
The government has implemented security measures to protect personal information. However, it’s always a good practice to be cautious while sharing your personal details. Ensure that you are using official government portals or channels for linking.
Can I link multiple PAN cards to one Aadhar?
No, an individual can link only one PAN card to one Aadhar number. Multiple PAN cards are not allowed.
What should I do if there is a discrepancy in my Aadhar or PAN details?
If you notice any discrepancies in your Aadhar or PAN details, you should update them through the respective official channels before linking them.

September 22, 2023

Economy

9 Economic Impacts of Chandrayaan 3

September 22, 2023

Chandrayaan 3 Setting Records For India and more

What makes the success a moment to celebrate is that India becomes the fourth country after the US, China, and Russia to soft-land a craft on the Moon. Furthermore, India is the first nation to successfully land an unmanned craft on the south pole of the Moon. Chandrayaan 3’s landing date and time will not be just another memorable date in history but will take the Indian economy a couple of notches higher.

To add to the achievements, Chandrayaan 3’s Vikram Lander has already surpassed its mission objectives with a successful hop experiment. Furthermore, the rover Pragyaan has completed all the assignments. Pragyaan and Vikram are set to ‘Sleep’ mode and awaken on 22 September 2023 after bracing the cold lunar night.

Impact of India’s successful Chandrayaan 3 Moon Mission

The success of Chandrayaan 3 has increased the credibility of India’s space program and has the potential to impact the Indian economy positively. The success is not just a proud moment, but it has proved to the world the scientific and technological advancement made by the country.

Here are some of the ways this mission can impact the Indian economy:

1. Creating Job opportunities in Space tech

India’s successful Chandrayaan 3 mission has given the Indian space tech sector the boost it deserves and attracted potential investments. This mission has demonstrated the country’s capabilities in space exploration.

According to a study published in December 2022 by IBEF, India contributes to about 2.1% of the global space economy. It has a market share of $9.6 billion, which comprises about 0.4% of the country’s total GDP.

2. Increasing Opportunities for Startups

The landing of Chandrayaan 3 has opened up many opportunities for startups involved in sectors like aerospace, space tech, defense, and research and development. This significant event will encourage private investment in these startups, positively impacting the country’s economic growth. In June 2023, Google invested in Pixxel Overall, a Benguluru-headquartered space-tech startup, by leading the USD 36 million Series B funding round.

According to the Economic Survey, Indian startups in this industry have grown to over 101 startups in 2022. They have received funding of around USD 108.52 million in 2022 from just 67.2 million in 2021 and are set to go up to USD 300 million in 2023.

3. Amplified focus on Space tech and infrastructure

The Chandrayaan 3 mission called for developing the most advanced technology and equipment, in addition to innovation in the scientific sector. The investment made in research and development for this mission has finally borne fruit. It has led to advancements in various sectors, like satellite technology, remote sensing equipment, and propulsion systems.

This mission has made India an essential global satellite launch market player. In 2020, the Indian Space Sector was valued at USD 9.6 billion and contributes 2%-3% of the global space economy. India’s global space economy share could reach 4% at 9.2% CAGR (2022-2040).

4. Foster Education

The Chandrayaan 3 mission has played a vital role in encouraging education and research in this area, inspiring students to pursue a career in the space sector. The ISRO STEM portal offers several activities related to space, technology, and its application. ISRO also provides training programs on assembling and building nanosatellites, known as UNNATI (UNispace Nanosatellite Assembly & Training by ISRO), to international students, engineers, or scientists.

5. Growth of the Research & Development sector

It has pushed academic institutions and research organizations to partner with ISRO on space research and its related areas. ISRO has formed working groups with other space agencies to explore cooperation areas in space science. For instance, the ISRO-NASA Planetary Science Working Group, the ISRO-NASA Heliophysics Working Group, and the ISRO-ASI in Heliophysics and lunar science.

It also will meet the representatives from ESA, NASA, SANSA, CONAE, CSA, CNES, and the Russian Academy of Sciences (RAS). These partnerships will have a long-term impact on the Indian economy as they fuel innovation and drive technological advancements in multiple sectors.

ISRO has established nine Space Technology Cells (STC) at top-ranking institutions like the Indian Institute of Science (IISc), Bengaluru, the Indian Institute of Technology (IITs) – Bombay, Kharagpur, Kanpur, Guwahati, Madras, Delhi, and Roorkee, and a Joint Research Programme with Savitribai Phule Pune University (SPPU, Pune) to conduct research activities in space technology and applications.

6. Augmenting the National Security

The Chandrayan 3 mission, accompanied by scientific and economic benefits, also bolsters the country’s national security efforts. The successful operation and launch of the mission have proved that India is capable of developing and managing complex space tech and space-based assets. This capability is crucial to inspecting the borders, identifying potential dangers, and ensuring national security.

7. International Collaborations

The Chandrayaan 3 mission has made India proud and enhanced its global status. The success of this mission has helped India get recognized in the international space community, bringing in opportunities for international collaboration and partnerships.

ISRO has signed six agreements with four countries for foreign satellite launches between 2021 and 2023. Commercially, these launches have the potential to generate USD 141 million in revenue.

8. Bolstering the India’s Soft Power

The Chandrayaan 3 mission has been able to enhance the nation’s soft power capabilities on a global scale. India’s achievements in space and space exploration have amassed admiration globally, aiding in reshaping the international perception of the country.

The Chandrayaan 3 landing date and time have not only given the country’s image a positive fillip but have boosted foreign collaborations and partnerships in scientific research and development.

The space cooperation with France now includes areas like human spaceflight, space situational awareness (SSA), and Earth observation.
The India-Japan (ISRO-JAXA) space cooperation focuses on satellite navigation, lunar exploration, and earth observation. The validity of IA for Agromet collaboration with JAXA has been extended until November 2025.
The ISRO and European Space Agency (ESA) cooperation has expanded from the domain of earth observation and space exploration to other areas.

9. Entering the Moon economy

The Chandrayaan 3 mission has opened up the “moon or lunar economy” for India. This emerging sector is estimated to reach USD 13 billion by 2025. By 2030, India aims to capture a larger share of approximately 10% of the global economy. This can open up many business opportunities, technological developments, and valuable lunar exploration opportunities.

The Chandrayaan 3 mission has had a significant impact on the Indian economy. It has boosted the space technology sector and encouraged education, research and development, and innovation. This mission has put India on a pedestal in space exploration and propelled it to new heights in every aspect.

FAQs

What was the budget of the Chandrayaan 3 mission in Indian rupees?
The budget of Chandrayaan 3 was estimated to be around ₹615 crores.
How will the Chandrayaan 3 mission impact India?
The Chandrayaan 3 mission can enhance India’s position on the global map in space technology and exploration. It can also give the Indian economy a well-deserved uplift.
When was Chandrayaan 3 launched?
Chandrayaan 3 was launched on 14 July 2023. This mission consists of the lunar lander named ‘Vikram’ and the lunar rover named ‘Pragyan.’

September 8, 2023

Economy

UPI ATM & Conversational Transactions: All You Need To Know

September 8, 2023

Digital transactions in India have been transformed by the Unified Payments Interface (UPI) in recent years. It provides users with a hassle-free and easy way to transfer money. This innovative payment system has evolved continuously, introducing new features to improve the user experience. In this article, we will discuss two significant additions: UPI ATM and Conversational UPI transactions.

UPI ATM: Redefining Accessibility

The Unified Payments Interface Automated Teller Machine (UPI ATM) is an innovative feature that combines digital and physical transactions. With UPI ATM, customers can withdraw cash from ATMs without a debit card. The HITACHI Money Spot UPI ATM is a prime example of this technology.

The launch, in partnership with NPCI, will redefine the ATM experience for Indians. Hitachi is the only White Label ATM operator allowing cash deposits.

The ATM is powered by Android OS, enabling users to retrieve funds from multiple accounts through their UPI app. This functionality primarily benefits regions with limited traditional banking infrastructure and card coverage, promoting financial inclusion and convenient banking access. With improved security measures and a user-friendly interface, the ATM ensures you a hassle-free cash withdrawal experience.

How Does UPI ATM Work?

Making a transaction through the Unified Payment Interface (UPI) ATM option is simple and secure. First, the user generates a unique code, which is used to authenticate the transaction at the ATM. Once verified, the requested amount is dispensed from the ATM, giving the user a seamless and hassle-free experience.

Choose the cash amount you wish to withdraw.

The ATM displays the UPI QR code linked to the chosen amount.
Scan this QR code using your UPI application.
Enter the UPI PIN for transaction authentication.
Take your money.

Who Can Benefit from UPI ATM?

The Unified Payment Interface ATM is a revolutionary feature that benefits diverse users. From tech-savvy millennials to individuals living in remote areas with limited access to traditional banking, this feature empowers everyone with easy access to cash. It will promote financial inclusion by facilitating easy access to banking services in areas with limited conventional banking infrastructure and low card penetration.

Where Can You Find HITACHI UPI ATMs?

HITACHI ATMs are available in over 3,000 locations nationwide and can be easily located using UPI-enabled apps.

Enhancing Security Measures

ATMs have always been known for their convenience, but security has been a concern for many users. Traditional ATM transactions have always been at risk of card skimming and unauthorized access, which can make users feel insecure about their accounts.

However, new ATMs have been designed using a unique one-time code system to eliminate this risk. This makes it almost impossible for fraudsters to access user accounts, ensuring that users can have peace of mind and carry out transactions without worrying about their security.

Distinguishing UPI ATMs from Cardless Cash Withdrawals

Unlike cardless cash withdrawals that rely on mobile numbers and OTPs, the UPI-ATM uses QR-based UPI cash withdrawal mechanisms. Users must install a UPI app on their Android or iOS devices to use this technology.

Conversational UPI Transactions: A Natural Interaction

The National Payments Corporation of India (NCPI) introduced Conversational UPI. These transactions will revolutionize the way users interact with the UPI platform. This feature will let users initiate transactions using natural language commands, making the process more intuitive and user-friendly.

Why did NCPI introduce Conversational UPI Transactions?

The traditional process of initiating UPI transactions involves navigating through various screens and input fields, which can be daunting for some users. Conversational UPI simplifies this process, allowing users to perform transactions with ease.

Why Choose NCPI’s Conversational Feature?

NCPI’s feature simplifies the transaction process, making it easier for users with limited technical proficiency to navigate the UPI platform effortlessly. Conversational transactions via UPI are a significant step towards creating a more inclusive digital payment ecosystem, empowering users who face challenges with traditional interfaces. This will make digital transactions accessible to a wider audience, thereby promoting financial inclusion.

Who Benefits from Conversational UPI Transactions?

Conversational UPI is particularly beneficial for users who may not be tech-savvy or those with limited dexterity. This feature levels the playing field, ensuring everyone can leverage digital payment advantages.

How to Use Conversational UPI Transactions?

Users can activate the voice command feature in their UPI-enabled app to make transactions by speaking their commands, such as “Send 1000 rupees to Shanti.” The app will confirm the details before processing the request.

Embracing the Future of Digital Transactions

With the introduction of the HITACHI UPI ATM and NCPI’s Conversational Feature, the Unified Payment Interface ecosystem continues to push the boundaries of convenience and accessibility. These features not only cater to the diverse needs of users but also represent a significant step towards a more inclusive digital economy. So, whether in a bustling city or a remote village, Unified Payment Interface ensures you’re never far from the future of digital payments.

FAQs

Can I use UPI ATM at any ATM?

Yes, you can use it at any ATM that supports UPI transactions.

Can I set up a voice command in multiple languages for NCPI’s Conversational Feature?

Yes, NCPI’s Conversational Feature supports multiple languages for user convenience.

Can I use UPI ATM for international transactions?

No, this service is currently only available for domestic transactions within India.

What if my voice command is not recognized?

In such cases, users can manually input transaction details.

Are there any additional charges for using UPI ATM?

Such transactions do not incur additional charges beyond standard UPI fees.

August 18, 2023

Economy

Semicon India 2023 Highlights: The Government’s Vision For Semiconductors

Semicon India 2023

A game-changing event has emerged on the horizon in the ever-evolving world of technology: Semicon India 2023. This event held more than just promise; it possessed the ability to change the industry.

As a result of Prime Minister Modi’s appealing address at the event, which resonated across international borders, India invited foreign chipmakers to join its spectacular growth path in the semiconductor industry.

Global Semiconductor Revenue by Segment

Semiconductor devices are categorized into discrete, integrated circuits (ICs), optoelectronics, and sensors & actuators. In 2023, the semiconductors market is expected to make around US$8 billion in revenue. Integrated Circuits will lead the market, with a projected volume of US$3 billion in the same year. The revenue is predicted to grow steadily at 8.31% annually from 2023 to 2027, resulting in a market volume of about US$11 billion by 2027.
China will generate the most revenue among all countries, reaching an impressive US$180 billion in 2023.

India’s Expanding Semiconductor Market

PM Modi speech urged foreign chipmakers to invest in India. It demonstrates India’s desire to establish itself as a reliable chipmaking partner. The industry here is expanding thanks to important players and initiatives.

The PM’s approach coincides with government efforts to strengthen the chipmaking sector. These actions include funding research, encouraging local manufacturing, and creating a favorable environment for chipmakers to help make India a significant player in the global semiconductor industry.

PM Modi speech at the Semicon India 2023 captures India’s potential as a viable chip hub and dependable supplier. It emphasized India’s strengths, which include a qualified workforce, modern manufacturing capabilities, and a robust R&D infrastructure. A strong focus on data security, intellectual property protection, and collaborative activities strengthens India’s commitment to being a reliable semiconductor partner.

Also Read: Top Semiconductor Stocks in India

Explosive Growth in India’s Digital and Electronic Manufacturing

India has shown remarkable digital and electronic manufacturing progress, with a staggering surge in the country’s global electronic manufacturing share, soaring from $30 billion to over $100 billion. Another factor aiding growth is the notable increase in electronic manufacturing exports and the creation of over 200 mobile manufacturing units nationwide.

Global Industry Gathering at Semicon India 2023

Representatives from major corporations like Micron Technology, Applied Materials, Foxconn, SEMI, Cadence, and AMD participated in the conference. Over the three-day event concluding on July 30, industry experts specializing in semiconductor chip technology, display fabrication, chip design, and assembly converged worldwide to discuss India’s burgeoning prospects.

AMD’s Bold Investment in India’s Semiconductor Future

AMD, a prominent semiconductor player, unveiled its visionary investment strategy in India at the conference. The company plans to infuse approximately $400 million over the next five years to fortify its national research, development, and engineering operations.

AMD’s ambitious agenda includes establishing a cutting-edge campus in Bangalore, set to be the company’s world’s largest R&D facility. PM Modi speech also drew attention to the recently approved National Quantum Mission, which includes ideas for introducing semiconductor-related courses in over 300 Indian colleges.

Semicon India 2023: Catalysing India’s Chip Landscape

Under the theme “Catalysing India’s Semiconductor Ecosystem,” Semicon India 2023 convenes global leaders from academia, industry, and research institutions. The event serves as a platform to spotlight India’s chip-making strategy and policy, fostering valuable discussions and collaborations.

Foxconn Chairman’s Optimism on India’s Potential

Foxconn Chairman Young Liu is optimistic about India’s role in the chip-making industry. He highlights collaboration and India’s consumer market as key factors. Liu calls for joint efforts to create a favorable manufacturing environment based on his outlook on the growing opportunities in India’s chip-making sector.

India’s Chip Industry: A Bright Future Ahead

Despite joining the chip game relatively later, India is setting its sights high. The chip market, valued at $23 billion, has ambitious plans to skyrocket to a staggering $80 billion by 2028.

Micron Technology’s CEO, Sanjay Mehrotra, revealed plans for a substantial $2.7 billion investment in Gujarat, focused on chip testing and packaging. This intelligent move plans to create about 5,000 much-needed jobs in the state.

Sahasra’s Exciting Journey

Sahasra Semiconductors is gearing up to assemble memory chips in Rajasthan’s Bhiwadi plant by September or early October. With a targeted revenue of Rs 500 crore over four to five years, the company benefits from the SPECS scheme, securing a 25% capital expenditure incentive.

A total investment of Rs 600 crore is planned, with Rs 110 crore already invested in the initial chip assembly phase. CEO Varun Manwani shares the company’s intention to join the chip-making incentive scheme, wherein the government covers 50% of project costs.

Final Words

The focus on Semicon India 2023 and PM Modi speech highlight India’s strength in the semiconductor industry. With strategic investments and a collaborative mindset, India is poised to redefine the global semiconductor narrative.

FAQs

What are the opportunities for foreign investors in the Indian semiconductor industry?

Foreign investors have numerous prospects in the Indian semiconductor business. Among these possibilities are:
● establishing chip manufacturing plants
● Research and development funding
● Collaboration with Indian firms
● fostering the growth of a home design ecosystem

What are the risks of investing in India’s semiconductor industry?

The dangers of investing in the Indian semiconductor industry include the following:
● Expensive labor costs
● a scarcity of skilled labor
● a lack of a robust domestic design ecosystem

What is driving semiconductor demand in India?

Three industries drive semiconductor demand in India: smartphones and wearables, automotive components, and computers and data storage.

How does an expanding domestic semiconductor sector affect consumers?

Consumers can profit from a rising domestic semiconductor industry by accessing high-quality electronic products at affordable prices while encouraging local innovation.

How does a robust local semiconductor sector aid India’s other industries?

A solid domestic semiconductor industry can benefit other sectors by providing access to locally manufactured components at competitive prices, reducing reliance on imports, encouraging innovation through cross-sector collaboration, creating job opportunities, and contributing to overall economic growth.

What is the role of India in the global semiconductor market?

The global semiconductor market is seeing India grow into a prominent player. While the country is still establishing its semiconductor manufacturing capabilities, it has a strong presence in semiconductor design and software services, contributing to the industry’s innovation and growth.

July 5, 2023

Economy

Unveiling India’s GDP Growth: Trends And Impact

Introduction

India’s GDP has witnessed a remarkable surge, surpassing all expectations and clocking a growth rate of 7.2% in the fiscal year.

In this article, let’s briefly overview India’s GDP performance and highlight its significance. Additionally, let’s understand India’s GDP growth in the global economy, shedding light on its implications for its position in the global market. Stay tuned for an analysis of GDP data and its impact.

India GDP Data Beats Expectations

India witnessed a significant GDP boost in the fourth quarter of the financial year, surpassing projections. The GDP at Constant (2011-12) Prices in Q4 2022-23 is estimated at ₹43.62 lakh crore, compared to ₹41.12 lakh crore in Q4 2021-22, which is a growth of 6.1%. This substantial increase contributed to the yearly change in Real GDP or GDP at Constant (2011-12) Prices of 7.2% or ₹160.06 lakh crore for the fiscal year 2022-23.

Union Finance Minister, Ms. Nirmala Sitharaman, said India’s GDP touched the US$ 3.75 trillion mark in 2023, up from around US$ 2 trillion in 2014. According to the Finance Ministry, India’s economy has been ranked as the fifth largest in the world from the tenth largest.

In terms of current prices, India’s GDP was US$ 3,737 billion, which ranks above the UK (US$ 3,159 billion), France (US$ 2,924 billion), Canada (US$ 2,089 billion), Russia (US$ 1,840 billion), and Australia (US$ 1,550 billion) at current prices.

Factors Contributing To India’s GDP Surge

Agricultural and construction sectors

The unexpected growth of 5.5 % in the agricultural sector during the January-March rabi months and the significant surge of 10.4 % (₹ 3.9 lakh crore) in the construction sector played vital roles in India’s outstanding GDP performance. These sectors demonstrated resilience and contributed positively to the overall growth.

Ongoing structural reforms and favorable government policies: Continuous structural reforms and favorable government policies have enabled India to outshine other major economies. These reforms likely created an environment conducive to economic growth.
Resilience amid global challenges: While Europe and the United States faced challenges due to the Ukraine war and financial difficulties, India managed to defy these global factors and maintain its growth momentum. This resilience showcases India’s potential to act as an engine of world growth.

Two years ago, India experienced a low-growth phase, reaching negative figures. Therefore, the current growth rate signifies a significant improvement and instills optimism for India’s future economic performance.

Private final consumption expenditure (PFCE) growth slowed down over the year, indicating a distribution challenge and a link to the decline in the quality of jobs. Additionally, there are concerns about a slowdown in key infrastructure sectors and the manufacturing sector’s contraction in three quarters. These factors may pose risks to future growth and undermine the encouraging aspects of the GDP data.

This graph shows India’s GDP growth rate in 2023 outpaces emerging and major economies.

Market Reactions and Implications: India’s GDP Exceeding Expectations

Markets reacted to India’s GDP data exceeding expectations in a mixed way. While optimism surrounds the services sector’s strong performance and improved foreign capital inflows, concerns remain regarding the slump in net exports and the manufacturing sector.

The market reactions to the GDP data have implications for investors and businesses. The strong performance of Indian companies, with top-line growth of 12% in Q4FY23 and a net profit increase of 19%, reflects positively on the market. Improved foreign capital inflows of $6 billion in FY24 also contribute to market confidence.

The implications of the GDP data on key sectors of the Indian economy are twofold. The services sector shows resilience and expects to continue driving growth, while net exports and the manufacturing sector pose challenges. Care Rating projects that the overall economic growth in FY24 will moderate to 6.1%, influenced by global economic uncertainties and potential spillovers from the external sector.

The graph below shows that India’s GDP exceeded RBI and other agencies’ expectations.

Final Words

India’s GDP has surged, exceeding expectations from RBI and other major agencies and showcasing remarkable growth. Factors such as resilient agricultural and construction sectors, ongoing reforms, and favorable government policies have contributed to this achievement.

However, private consumption, infrastructure, and manufacturing challenges pose risks. Market reactions have been mixed, with optimism for services and foreign capital inflows, while concerns persist for net exports and manufacturing. Despite uncertainties, India’s GDP growth signifies a positive economic trajectory and future potential.

FAQs

What is the outlook for India’s growth in GDP for the coming years?

Fitch Ratings downgraded its forecast for India’s GDP growth in 2023-24 from 6.2% to 6%, citing headwinds from rising inflation and interest rates and weak global demand. The agency expects the Indian economy to rebound to 6.7% in 2024-25.

What are the implications of the global economic uncertainties for growth in the GDP of India?

Global economic uncertainties are a challenge for India’s GDP growth because they can slow global trade and investment. This can hurt India’s exports and investment, dampening economic growth.

What are the implications of the slowdown in private consumption for GDP growth in India?

The slowdown in private consumption is a challenge for India’s GDP growth because it is a major driver of economic growth. When people consume less, they spend less money, which reduces the demand for goods and services. It can lead to businesses slowing down their investment and hiring, further dampening economic growth.

What are some of the risks to India’s GDP growth?

Some of the risks India faces in the context of GDP growth include:
● The global economic slowdown.
●   Rising inflation.
●   Geopolitical tensions.
●   Natural disasters.

What are some of the opportunities for India’s GDP growth?

Some of the opportunities for India’s GDP growth include:
●  The continued growth of the global economy.
●  India’s expanding middle class.
●  The development of new technologies.
●  The opening up of new markets.

June 8, 2023

Economy

US Debt Crisis Vs. Indian Bank Rally: A Comparison

The US debt crisis and the Q4 rally in Indian bank stocks have captured significant attention in the global financial landscape. This article provides a concise overview of these events and their profound significance.

Delving into the US Debt Crisis and the debt ceiling, we analyze the potential implications that may arise. Additionally, we explore the Q4 rally in Indian bank stocks, examining its drivers, such as the Nifty and Bank Nifty.

What is the US Debt Crisis and Its Purpose?

The debt ceiling refers to a statutory limit imposed on the debt the United States government can legally borrow. It sets a cap on the total outstanding debt the government can accumulate to fund its expenditures, including social programs, defense, and interest payments.

The debt ceiling ensures fiscal discipline and control by restricting the government’s borrowing capacity.

US Debt Crisis: A Brief History of Crisis and Resolution

Year	Event
1917	Debt ceiling established
1939	First debt limit increase
1974	Debt ceiling linked to the budget process
1985	Gramm-Rudman-Hollings Act
1995	Government shutdown over the debt ceiling
2011	Debt ceiling crisis and downgrade
2013	The government shutdown and debt ceiling
2019	Debt ceiling suspended until 2021
2021	The Debt ceiling was reinstated in August
2023	Debt ceiling crisis averted

The potential implications of the US Debt Crisis:

The US Debt ceiling could lead to a government shutdown, disrupt essential services, and cause market volatility. It may also impact global financial stability, trade, investments, and economic growth due to a potential downgrade in the US credit rating and increased borrowing costs worldwide.

US Congress prevents US default by raising the debt ceiling

The US Congress has approved legislation to lift the government’s $31.4 trillion debt ceiling, preventing a historic default. The bill passed with bipartisan support, with the Senate voting 63-36 in favor. The Treasury Department had warned of the inability to pay bills if action was not taken by June 5.

The legislation suspends the debt limit until January 1, 2025, providing relief and avoiding a default. President Joe Biden praised the timely action and will sign the law. The next budget fight looms, as Senate Republican Leader Mitch McConnell expressed concerns about Democrats’ spending.

The bill does not include tax hikes, but it contains reductions in discretionary spending. Failure to raise the debt ceiling could have triggered global financial repercussions. The deal was reached after weeks of negotiations between Biden and House Speaker Kevin McCarthy, resulting in a bipartisan agreement.

*Note: Bipartisan agreement is when both major political parties in the US agree on a piece of legislation. It can help pass laws and build trust.

Meanwhile, India’s growing economy is seeing a surge in banking stocks. Let us look at Indian Banks’ Q4 rally.

Indian Banks Thrive: Q4 Rally

The Bank Nifty index reached a record high of 44,483, extending its rally in recent sessions. Strong Q4 results, a retracement of the US dollar, and continuous buying by foreign institutional investors (FIIs) have propelled the banking sector’s outperformance.

This trend will continue as investors show interest in mid-cap and small-cap stocks. The positive Q4 numbers indicate growth and demand in the Indian economy, likely fueling credit growth in Indian banks.

Financial Experts predict that the Bank Nifty index could reach 46,000 in the short term. The rally in Indian banks during Q4 has positioned them ahead of Nifty and Sensex, making them an attractive choice for investors. The initial focus on large-cap banks has shifted towards low-priced mid-cap and small-cap stocks.

India’s Banking Sector Shows Strong Recovery

Banking stocks have shown a strong rally due to rising interest rates, an improved NPA situation, and a positive market outlook.

In seven years, the Indian banking system, especially public sector banks (PSBs), has shown signs of recovery in 2023. The government and RBI worked to reduce the high level of non-performing assets (NPAs) in PSBs from 14.6% in 2018 to 4.41% in 2023.

To support the PSBs, the government infused ₹3.1 lakh crores from 2017 to 2021. The RBI implemented reforms to improve credit discipline, responsible lending, and governance. Bank mergers also helped reduce NPAs by 10%. As a result, Indian banks have reported their best results in a decade, according to S&P Global Ratings.

Retail loan growth has outpaced industrial loans, signaling economic growth. Overall, the banking sector is expected to perform well in the second half of 2022, driven by loan growth and improved asset quality.

Risk Factors and Future Outlook: USA to Indian Banking System

The US crisis risks global markets, including India’s Nifty index. Government shutdown, delayed payments, and loss of confidence in the US dollar. Financial market disruptions, increased borrowing costs, and reduced business and consumer confidence are some of the risks India may face.

Turbulence in international markets and cautious investor sentiment

Assessing the sustainability of the Q4 rally in Indian bank stocks is a must. Rising interest rates, improved NPA situation, and favorable market outlook. Evaluating whether the rally is based on fundamental improvements or market sentiment. Economic uncertainties, regulatory changes, and challenges in credit growth may impact sustainability.

Final Words

The US debt ceiling crisis risks global markets, including India’s Nifty. The Q4 rally in Indian bank stocks indicates a recovery, but sustainability depends on economic uncertainties and regulatory changes. USA’s timely resolution has helped avoid severe consequences and impact on global markets.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considerea d as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQs

What is the potential impact of a debt ceiling default?

A debt ceiling default could result in a weakened U.S. dollar, higher interest rates, reduced economic growth, and diminished confidence in the government.

What are the opportunities for India’s banking system?

Opportunities for Indian banks include corporate credit demand, rising incomes, digital banking adoption, and government infrastructure spending.

May 10, 2023

Economy

India And China’s Role In Global Growth: IMF Insights

Introduction

The International Monetary Fund (IMF) has predicted that the Asia-Pacific region will experience a growth of 4.6% in 2023, and India and China will play a significant role in contributing to half of the global growth.

In particular, India’s GDP is expected to grow in 2023 and 2024, driven by a rebound in consumption, investment, and government support measures. China’s GDP is also expected to grow in the same period, with a rebound in exports, infrastructure spending, and private consumption being the main drivers.

The growth of India and China is critical to global growth, given that they are the world’s two most populous countries with large consumer markets. In addition, both countries are major exporters and have significant global economic influence. Moreover, the growth of India and China can have a ripple effect on other countries in the region and beyond.

IMF predicts India’s GDP growth could rebound in FY24

According to the International Monetary Fund, India’s GDP is projected to grow in 2023 and 2024, with a rebound in consumption, investment, and government support measures driving the country’s growth.

India’s economy expects to expand rapidly, driven by strong domestic demand, a revival in exports, and increased government spending. The IMF has raised its growth projections for India and sees its economy rebounding from the pandemic-induced contraction.

The report also states that China is expected to lead the global recovery, contributing significantly to global growth in the coming years. As India and China’s contributions to global development increase, the Asia-Pacific region is expected to contribute 70% of global change.

This development is significant for the global economy, as the region’s growth expects to positively impact the global economy, driving economic recovery and growth. The IMF’s projections for India’s growth highlight the country’s potential to drive global economic growth as it continues to recover from the impact of the pandemic.

The Indian GDP growth rate has fluctuated from 2019-20 to 2023-24.

This growth indicates that the Indian economy is gradually recovering from the pandemic-induced slump, and it expects to show a strong rebound in the upcoming quarters.

IMF Expects China’s GDP to Grow in 2023-24, Boosting Half of Global Growth Along with India

This effect comes after the Covid-19 pandemic plunged the world into an economic crisis, with governments scrambling to mitigate the damage.

According to the IMF’s projections, China has weathered the storm and expects to play a significant role in the region’s economic growth. The country’s GDP intends to grow in 2023 and 2024, driven by a rebound in exports, infrastructure spending, and private consumption.

China’s GDP growth rate has fluctuated from 2019 to 2024.

Additionally, India also hopes to contribute significantly to the region’s growth. This growth forecast is good news for the world economy, which is struggling to recover from the pandemic’s impact.

Why India and China are critical to global growth?

The IMF expects India and China to contribute half of the world’s economic growth in the near future. As the world’s two most populous nations with massive consumer markets and significant export capabilities, India and China significantly impact the global economy.

Challenges for India and China’s Economic Growth

Despite significant contributions to global economic growth, India and China face substantial challenges. India, in particular, is struggling with high inflation, mounting debt levels, and a weak banking sector. These issues could impede the country’s economic progress and limit its contribution to global growth.

However, the International Monetary Fund (IMF) predicts that India and China could still account for half of global growth in the near future, underscoring the importance of these two economies to the global economy.

While China is grappling with challenges such as an aging population, income inequality, and environmental degradation, India’s ability to overcome its obstacles will be crucial to sustaining its economic growth and continued contribution to the world’s economy.

India and China: Opportunities in Manufacturing and Innovation

While both countries face significant challenges, they also have opportunities to drive their economies forward. For example, India has the potential to become a global manufacturing hub and attract foreign investment, particularly considering the recent policy reforms aimed at increasing the ease of doing business.

In addition to manufacturing, India has a rapidly growing service sector and a young, tech-savvy population that is driving innovation and entrepreneurship. Meanwhile, China is investing heavily in technological innovation and shifting towards a consumption-driven economy, which could increase import demand from India and other countries.

Since China faces several challenges, India can capitalise on the opportunity to emerge as a critical economic powerhouse. It has the capacity to create jobs and drive growth not just within its borders but around the world too.

Final Words

The IMF predicts India and China to contribute significantly to global economic growth in 2023 and beyond. Whether both countries can overcome the challenges and gain from their opportunities is to be determined.

FAQs

How does India’s economic growth compare to other countries in the Asia-Pacific region?

The IMF predicts that the Asia-Pacific region will grow by 4.6% in 2023, and India’s projected 6.5% growth rate is higher than the regional average.

What are some factors contributing to India’s economic growth?

Several factors drive India’s economic growth, including government reforms to attract foreign investment, a growing middle class with increased purchasing power, and a burgeoning tech industry. Furthermore, India’s large population and relatively low labor costs make it an attractive destination for businesses seeking to expand.

How does India’s economic growth compare to China’s, and what factors drive their growth?

India’s projected economic growth rate in 2021 is 12.5%, higher than China’s expected growth rate of 8.5%. Factors driving India’s growth include structural reforms, government spending, and a rebound in consumer spending, while exports and government stimulus drive China’s growth.

April 12, 2023

Economy

Will Indian Economy Exports Cross $760Bn In FY23?

India’s export industry plays a vital role in the growth and development of the Indian economy. It’s a significant contribution to the nation’s GDP. Moreover, with India’s growing presence in the global trade market, exports have become an essential source of foreign exchange earnings.

Furthermore, exports promote entrepreneurship, innovation, and technological advancements. The Indian government has recognized exports’ importance and implemented policies and initiatives to support the industry’s growth. With India’s increasing participation in the global trade market, the future looks promising for the country’s export industry.

Indian Economy Exports in FY23 – The Forecasted Value and Factors Contributing to Growth

India’s goods and services export industry has been growing steadily over the past few years, and the latest reports suggest that the sector is set to reach new heights in FY23. The projected value of $760 billion in exports represents a significant increase from the previous years’ figures, indicating that India’s economy continues to show signs of resilience and growth.

The efforts led by Piyush Goyal, India’s Minister of Commerce, have been instrumental in driving this growth forward. Additionally, the country’s diverse manufacturing and service sectors have contributed significantly to the increase in exports.

**Source: Ministry of Commerce & Industry**

These positive figures demonstrate India’s continued potential for economic growth and present new opportunities for businesses and investors looking to tap into the country’s thriving export industry.

The graph below depicts progress made by both merchandise and services from April-February.

The table shows the growth rates of major sectors contributing to Indian economy exports during February 2023 and April-February 2022-23.

Sector	February 2023 growth %	April-February 2022-23 growth %
Oil Meals	220.96	44.12
Iron Ore	51.37	–
Spices	30.85	–
Electronic Goods	29.85	49.54
Fruits & Vegetables	17.42	11.16
Gems & Jewellery	13.76	–
Rice	11.75	15.88
Ceramic Products & Glassware	11.5	7.62
Other Cereals	10.65	12.15
Oil Seeds	9.4	13.36
Cereal Preparations & Miscellaneous Processed Items	5.22	16.12
Marine Products	4.96	3.19
Drugs & Pharmaceuticals	4.72	3.14
Minerals Including Processed Minerals -Mica, Coal & Other Ores	2.97	–
Tobacco	–	34.3
Leather & Leather Products	–	11.08
Tea	–	10.03
Coffee	–	8.17
Organic & Inorganic Chemicals	–	3.91
Rmg of All Textiles	–	3.28

Source: Ministry of Commerce & Industry

According to the minister, the industry has warmly received India’s Free Trade Agreements with the UAE and Australia. Moreover, he emphasized that India’s FTAs were implemented with careful consideration and stakeholder involvement without sacrificing the quality of the agreements.

Indian Economy Exports Growth in FY23: Sector-wise Analysis and Key Drivers

The services sector plays a significant role in India’s economy, contributing more than 50% of the country’s GDP. This sector includes a range of industries such as trade, tourism, aviation, telecom, shipping, ports, communication and storage, financing, insurance, transportation, real estate, business services, software services, and IT-BPM.

The IT services and BPO industry alone employed over 4.47 million people directly and 12 million indirectly in 2020-21, accounting for approximately 8% of India’s GDP and more than 52% of the global outsourcing market. In the first half of 2020-21, the sector grew 10.8%. The tourism and hospitality services industry witnessed a remarkable recovery after the COVID-19 pandemic, with employment in the sector increasing by 48% in March 2022.

The graph below depicts the industry-wise share of total services sector exports.

India’s economy heavily relies on exporting services, such as travel, transportation, insurance, software-IT-BPM, business services, financial services, and communication. In 2020-21, India exported services worth US$206 billion, a figure that reached the projected target of US$250 billion in 2021-22 and is predicted to reach US$325 billion by 2022-23.

In 2021-22, India’s services exports generated a trade surplus of US$105.2 billion, a significant increase of 24% from 2019-20.
The services sector in India is the leading recipient of FDI inflows, with India being the fifth-largest recipient worldwide.FDI inflows into the industry totalled $16.73 billion in the first half of 2021–2022, accounting for 54% of all FDI into India.
One of the industries that received the most FDI was the computer software and hardware services sector, which in 2021–2022 received roughly 25% of all FDI into India. India’s overall FDI inflows for the same period were $83.57 billion.

Indian Economy Exports Top Services: Dominance in IT, Software and BPO Industries

India’s services, including software, computer, IT, BPO and call centres, are exported to many parts of the world, with the USA, the UK, and Japan being the largest importers. The availability of a large workforce, cheap labour, and English language skills makes India’s services popular worldwide.

During 2020-21, the USA and Canada imported $75 billion of software services from India. Other significant software service importers are Canada, Asia, Australia, and New Zealand. Other key export markets for India include Hong Kong, Singapore, Germany, Bangladesh, the Netherlands, and Nepal.

Indian Economy Exports: Government Initiatives

The Indian government has launched several initiatives to boost service exports, such as the Service Export from India Scheme (SEIS), Software Technology Park (STP) Scheme, Digital India Internship Scheme, and the PhD Scheme.

Additionally, the government is promoting trade deals with various countries, engaging with states, and implementing schemes like PLI, RoDTEP, and Pradhan Mantri Gati Shakti’s plan to achieve the target of making India a $5 trillion economy by 2025. The Export Preparedness Index (EPI) and LEADS have also been launched to evaluate state export readiness.

Indian Economy Exports: Challenges and Outlook

India faces challenges such as improving infrastructure and ease of business, but it also has opportunities to grow exports and achieve economic targets. India can leverage its skilled labour, diversify exports to new markets, and focus on product quality, innovation, and branding to overcome competition in the global market.

The government’s initiatives, such as the PLI scheme and recent trade agreements, support domestic manufacturing and greater market access to Indian products.

Final Words

In conclusion, India’s export industry plays a crucial role in the country’s economic growth and development. The sector shows promising growth and resilience, with diverse industries contributing to its success.

FAQs

Which crop is India’s largest exporter?

During 2021-22, rice accounted for over 19% of India’s total agricultural exports, making it the most important agricultural product exported from India.

Who handles exports in India?

The Central government exercises the powers conferred by section 5 of the Foreign Trade (Development and Regulation) Act 1992 to notify the Foreign Trade Policy, which regulates exports and Imports.

April 5, 2023

Economy

Why Are Economists Predicting Recession In 2023?

Amid the rising interest rates, chatter around the impending recession in 2023 is slowly gaining strength. And, with recent bank runs in the US and the forced merger of Credit Suisse with rival UBS, the predictions of a recession in 2023 appear to be coming true. We hope this doesn’t occur.

So, why are economists predicting recession in 2023? Let’s find out.

State of Global Financial System

The global financial system is highly complex, and economic growth is not entirely driven by corporate profits or buoyancy in government tax collections but by interest rates. Yes, you read that correctly.

In 1976, the global financial system witnessed a fundamental shift when US President Nixon ordered moving away from the Bretton Woods system, wherein the value of each dollar circulating in the economy was defined in gold, meaning each dollar in circulation was backed by gold and turned the monetary system into a flat one.

The dollar’s value was market determined with strict supervision of the Federal Reserve. It reduced the risk of overburdening the system with gold, allowing the government to raise more debt to fuel the country’s economic growth.

Since then, the global financial system has become heavily debt-driven. The total public debt as a percentage of GDP in the US had reached 120% by the end of 2022. Over $23.9 trillion in US treasury securities are outstanding in the market. It is also true for most developed economies.

Even a small percentage change in the interest rates can impact the stability of various economies. So, a delicate balance is needed when changing interest rates at regular intervals to avoid an inflationary situation without affecting the growth levels.

Inverted Yield Curve Has Economists Predicting Recession

When economies are overdependent on debt, the chances of economic accidents are always high, which can derail global economic growth. An inverted yield curve is one such financial accident. Usually, the return on long-term debt paper should always be higher than short-term debt papers in all circumstances, as long-term holders assume more risk by locking their money for longer.

But, when the yield on short-term debt papers exceeds that of long-term debt papers because of multiple rate hikes at short intervals, it results in an inverted yield curve.

An inverted yield curve occurs when the yield on 2-year Treasury securities exceeds the yield on 10-year Treasury securities in the market. As market participants become pessimistic about the economy’s outlook, demand for longer-dated bonds increases, driving down the yield.

The chart above shows that yield on 2Y US Government Bonds exceeded 10Y papers around July last year and continues to be in an inverted state. For example, at the start of March 2023, the 10-Y yield was around 4%, and the 2-Y yield was about 4.8%.

In 2023, the yield curve witnessed the deepest inversion since 1981.

Furthermore, as the yield on 2Y US bonds increases, the market value of previously issued 10Y bonds on lower rates falls, resulting in long-term holders of the debt paper suffering significant mark-to-market (MTM). It is one of the few reasons why the SVB and Signature Bank in the US collapsed.

Does an Inverted Yield Curve Indicate an Impending Recession?

An Inverted Yield Curve is not ideal for any economy as it destabilizes the debt market. Whether an inverted yield curve indicates, an impending recession is a much-debated topic. However, looking at the past will show that an economic slowdown always follows a yield inversion.

Since 1978, the global financial system has witnessed six yield curve inversions, and the gap between the start of inversion and recession ranged between 6 to 22 months. For instance, the 2008 global financial crisis happened 22 months after the first inversion of the yield curve was reported.

Number of months between yield curve inversion and the start of recession 1978-2022

Why does an Inverted Yield Curve indicate a Recession?

In an inverted yield curve scenario, investors’ expectation in the long term decline and tries to focus and profit from short-term bets. Similarly, businesses also put their long-term expansion plans on hold due to the evolving conditions, resulting in little demand for long-term funds. Therefore, overall demand takes a massive hit.

With the wider spread, the chances of an impending recession grow, and because of the pessimism surrounding the market gives way to fear that increases the likelihood of a recession.

Given the current global economic trajectory, where IMF has projected global growth to slow down to 2.9% in 2023 from 3.4% in 2022, which is why economists predicting recession is inevitable in 2023. In a WSJ survey in Jan 2023, economists have put a 61% probability of a recession in 2023.

FAQs

What is an inverted yield curve?

An inverted yield curve happens when short-term government bond yields exceed long-term government bond yields.

Does yield curve inversion indicate a recession?

Yes, yield curve inversion indicates a recession. For every downturn since 1978, yield curve inversion took place at least six months to one year before.

Why does yield curve inversion impacts economic growth?

Due to higher borrowing costs, businesses put a hold on their expansion plan and avoid taking risks, thus impacting overall demand.

What is El Nino and What Are Its Effects on India?

This update from the World Meteorological Organization (WMO) may worry you and affect the choice of food on your plate in the coming months. On March 1, 2023, WMO, an UN-based agency responsible for promoting international cooperation in atmospheric science and climatology, predicted that 2023 will be a year of El Nino.

The agency’s long-lead forecast has indicated 55-60% chances of El Nino from June to August. For the government and policymakers in India, it’s not a piece of good news either.

Let’s look at the economic impact of El Nino in the past to see which sectors will suffer the most.

What is El Nino?

El Nino is an unusual weather pattern in the Pacific Ocean and is associated with more rain in one part of the world and a drought-like situation in the other. The global climate depends a lot on surface water ocean temperatures, as they directly impact the rain on the earth. A warm ocean always results in higher rains around the region, so the oceanic region near the equator receives more rainfall than other parts.

In normal conditions, the wind blows the warm oceanic water in the pacific region near South America westward toward Indonesia, and the cool water below the equator rises toward the coastal surface of South America and then moves northwards.

However, when these winds are weaker and insufficient to move the warm surface oceanic water westwards, it begins to move in the opposite direction towards South America. Then it moves northwards, bringing in much rainfall around the region. While other parts of the world receive lesser-than-average rainfall that develops into El Nino-like conditions.

El Nino in India

The El Nino weather condition was first recorded or observed in 1578 by fishermen and occurs every two to seven years. During El Nino conditions, fish and other water bodies move to a cooler place or die due to the ocean’s water temperature change.

In recent times, India has experienced El Nino like conditions in 2009, 2014, 2015, and 2018. According to statistics, India has experienced drought-like conditions 60% of the time during El Nino years. The Indian Meteorological Department (IMD) has not confirmed or issued a statement regarding El Nino in 2023. And the intensity of El Nino conditions must be factored in while making any forecast.

Economic Impact of El Nino on India

If the forecast of El Nino becomes true, India will witness a spoiled southwest monsoon, which will directly affect the growth of the agriculture sector in 2023. El Nino Could Hurt India’s GDP, with every sector feeling the impact.

Let’s discuss the possible impact on the agriculture sector

During the monsoon, Kharif crops (rice, maize, cotton, oilseeds, sugar) are grown in India, and the season accounts for almost 80% of India’s total rice production. And, if you look at the total rain-fed agricultural land, it’s closer to 50% of the total cropped area in the country.

According to a government release in 2020, only 96,622 thousand hectares of cropped land had irrigation facilities in 2015-16 out of 1,97,054 thousand hectares of cropped land. However, the World Bank report suggests that nearly 40% of total agricultural land was irrigated in India in 2019. Whatever the percentage of total irrigated agricultural land in India is, the share of rain-fed agricultural land is still significant. It has the potential to impact food grain production and food inflation.

A study by ASSOCHAM in 2014 stated that a 5% deficit in rainfall due to the El Nino factor could result in a loss of ₹1,80,000 crores or 1.75% of the GDP. The study also revealed that a percentage point growth in agriculture leads to a 0.47% increase in demand for industrial goods and a 0.12% increase in demand for services. For every per cent deficit in average rainfall, the GDP will fall by 0.35%. Therefore, not just the agriculture sector but El Nino will spirally impact other sectors. The rural economy will be the worst hit, as they depend entirely on agriculture.

El Nino’s Impact on the Global Economy: An IMF Study

The International Monetary Fund (IMF) conducted a study in 2016 to analyze the macroeconomic impact of El Nino shocks between 1979 and 2013.

Considering factors such as energy and commodity prices, trade, etc., the study found that economies around Southeast Asia – India, Indonesia, Australia, New Zealand, South Africa, and others experience a short-lived fall in economic activity in response to the El Nino shock. But countries like the US, Mexico, Canada, Argentina, etc., benefit from El Nino activity due to the spillovers from other major trading partners.

Country-wise, El Nino Impact

India: As El Nino coincides with the monsoon season, it hurts the agriculture sector and increases domestic food prices. As food has the highest weight in India’s CPI basket, the change in inflation will be higher than in other affected economies.

Australia: Experiences dry and hot summers while the frequency and severity of bushfires increase. Such conditions reduce wheat exports, thus increasing wheat prices in the international market.

Indonesia: Badly impacts the country’s economy, as the output of coffee, cocoa, and palm oil falls, pushing up their prices. The country depends on hydropower to mine. It refines Nickel, the metal used to strengthen steel. So, the production and export of the metal will take a direct hit.

United States: Wet weather around California results in higher production of almonds, avocados, lime crops, and others. Also, warm weather in the northeast and high rainfall in the south result in diminished tornado activity and hurricanes and higher real GDP growth.

Canada: Enjoys warm winters, which is good for fisheries and improves crude oil production, thus bringing in higher revenue for the country.

One can only hope for better weather patterns, reducing the likelihood of an El Nino in 2023 and that India receives adequate annual rainfall.

FAQs

What is El Nino?

El Nino is an unusual weather pattern that occurs due to changes in the temperature of surface water in the Pacific Ocean, resulting in abnormal rainfall around the globe.

Is India affected by El Nino?

India is at higher risk of El Nino as it coincides with the country’s domestic monsoon season. El Nino-like conditions happened in 2009, 2014, 2015, and 2018.

What are the sectors affected by El Nino?

Agriculture is the worst hit sector during El Nino like conditions and results in less output of food grains. Less rainfall affects every other sector of the economy.

UPI Payment for International Travellers: All You Need To Know

UPI Payment for International Travellers

RBI extended UPI payments for international travellers facilitating local payments at G20 meeting venues and more than five lac merchant outlets across India to provide a seamless travelling experience. This facility is available only to selected G20 travellers at selected international airports but will soon be rolled out across all entry points.

While announcing the Monetary Policy Committee (MPC) on February 8th, the Central Bank, RBI, disclosed its plans to allow inbound G20 travellers to make UPI payments at selected destinations. Later, the RBI would expand this service to all entry points, including all international airports in India.

Let us walk you through the process of making UPI Payment for Foreign tourists & travellers, including eligibility, where the new facility is available, how it works, and much more. On the way, we’ll talk about the RBI’s pilot project launch to install QR-based coin vending machines (QCVM) in 12 cities.

UPI Payment for International Travellers Eligibility Criteria

The UPI payment for international travellers from G20 countries is available at three international airports: Bengaluru, New Delhi, and Mumbai. The G20 presidency keeps rotating annually, and in 2023, India holds the presidency from 1st December 2022 to 30 November 2023.

It is a prestigious moment for India as its first-ever G20 summit is hosted in India and South Asia. Members of G20 countries include Argentina, Australia, Brazil, China, France, Italy, Germany, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey (Turkiye), the United Kingdom, and the United States.

But RBI has proposed extending the UPI payment facility for foreign tourists and travellers after successfully framing necessary policies and guidelines based on learnings from this initiative. It will profit foreign visitors and highlight India’s technological progress to the rest of the world.

UPI Payment for International Travellers How Will It Work?

As per the Developmental and Regulatory Policy Statement released by RBI on 8th February 2023, the facility of UPI payments to international travellers has been launched. It will let foreign travellers make local payments to identified Merchants(P2M) through a Unified Payment Interface (UPI) platform.

Eligible travellers will receive a Prepaid Payment Instrument (PPI) in the form of wallets linked to their UPI for use only at selected merchant establishments (P2M). The PPI issuer is responsible for ensuring that the PPI issuing and operating company has the required permits. And to keep RBI informed regarding the names of companies that facilitate UPI payments to international travellers.

PPIs can be loaded/ reloaded by designated Banks and non-Banks in exchange for cash or any other payment instrument. PPIs for UPI payments to international travellers are issued after complete verification of their Passport and Visa at the issuance site.

UPI Payment for International Travellers -Supporting Banks

For now, ICICI and IDFC First Bank, both banks, and Pine Labs and Thomas Cook, both non-banks, have partnered with the National Payments Corporation of India (NPCI) to ensure safe, secure, and hassle-free UPI payments to international travellers from G20 countries.

RBI issued Policy Guidelines on Prepaid Payment Instruments (PPIs) to assist UPI payment for foreign tourists & travellers. To better understand the newly introduced policy guidelines on UPI payment for travellers, it is imperative to know about PPIs.

What are PPIs?

Prepaid Payment Instruments (PPIs) allow you to purchase goods and services, financial services, remittance facilities, and so on, using the stored value of the instrument. PPIs are only issued with the RBI’s approval or authorization.

Types of PPIs

Small PPIs and Full-KYC PPIs are the two types of PPIs. PPIs can be in the form of cards, wallets, or any other instrument that can be used to retrieve the amount contained in the PPI.

Small PPIs or Minimum-detail PPIs – These instruments can be issued after knowing a few basic details of the PPI holder and are restricted to purchasing goods and services only. Cash withdrawal and transfer facilities are not allowed in this category of PPIs.

Full-KYC PPIs– These instruments are issued only after completing the PPI holder’s complete Know Your Customer (KYC) and can be freely used to purchase goods and services, withdraw cash and transfer money.

PPI guidelines for foreign nationals and non-resident Indians (NRIs) visiting India:

Foreign nationals or NRIs visiting India can obtain rupee-denominated Full-KYC PPIs from approved banks or non-banks. This UPI payment facility for international travellers has been made available only to inbound travellers from G20 countries on a trial basis at selected airports. Considering what was learned and the system’s viability, it will be expanded to all entry points for travellers.
PPI Issuer is responsible for physically verifying the foreign national and NRI’s visa and passport and maintaining records for future use.
PPIs under UPI payment for international travellers can be issued only through wallets linked to their APIs. The amount in PPI wallet at any instance must not exceed the limit prescribed for the full-KYC list, i.e. Rs. 2,00,000/- at any time.
You can encash any unutilized balance in PPI in foreign exchange or transfer it back to the payment source only in compliance with the foreign exchange regulations under FEMA.
Conversion of PPIs into foreign currencies can be done only at FEMA-authorized centres.
Loading or reloading balances in PPIs shall be against receipt of foreign exchange in cash or any other payment instrument as prescribed.

Conclusion

UPI transactions in India have grown more than eight times in 2021-22 and almost 50 times in the last four years with several initiatives taken by Government, Banks, and NPCI.

Earlier, NRIs from selected countries (Singapore, Australia, Canada, Hong Kong, Oman, Qatar, USA, Saudi Arabia, United Arab Emirates, and the United Kingdom) could avail of the facility of UPI payments if their international mobile numbers were linked to their NRE/NRO accounts.

India has achieved global recognition due to its extraordinary commitment to transitioning from cash to digital payments. This initiative has alleviated the burden of carrying cash, rushing to currency exchange centres, international travellers, and reliance on international debit cards with high fees. The ability to make UPI payments to international travellers will boost UPI’s acceptance and prominence in foreign territories and help it establish itself as a global payment and money transfer network.

FAQs

Who is allowed to create PPI wallets linked to UPI for international travellers?

Only two banks, ICICI and IDFC First Bank and two non-banks, Pine Labs Pvt Ltd and Transcorp International Limited have been initially authorized to issue UPI-linked wallets.

How is this facility of UPI payment for international travellers different from UPI payments to NRIs?

The main distinction is that PPI issued under the UPI payment for international travellers is a pre-paid instrument. In contrast, UPI for NRIs is associated with fully KYC-compliant NRO/NRE accounts.

NRIs will have to link their bank accounts to their non-Indian mobile phone number with international country codes to avail of the service. When UPI is used, money is directly deducted from their linked bank accounts. In the case of the former, unutilized money can be returned to the customer, whereas in the latter case, this is unnecessary.

Can international mobile numbers used by NRIs be registered for making UPI payments during their visit to India?

Yes, NRIs who maintain their NRE or NRO accounts in India can now link their international numbers for making UPI payments for foreign tourists and travellers, but there are certain conditions to be fulfilled-
– Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account holders must comply with the Foreign Exchange Management Act (FEMA) or RBI regulations issued from time to time. Also, NRIs can use UPI hassle-free only with their international mobile number linked to their NRE or NRO account.
– To combat the financing of terrorism and anti-money laundering (AML), both the beneficiary and the member Bank must follow the guidelines (KYC), AML/CFT) issued in this regard.

March 8, 2023

Economy

China Borders Reopening: What You Need To Know

China borders reopening in 2023 marked a highly anticipated event for global trade and investments after extended travel restrictions due to the COVID-19 pandemic.

The impact of COVID-19 on China’s consumption and export/import sectors has been profound, with citizens opting for essential goods and online shopping. China’s monetary and fiscal policies, as well as the manufacturing, travel, and housing sectors, are all affected by the pandemic.

However, the question is, will reopening provide the anticipated economic boost? The pandemic had a significant impact on the Chinese economy. So let’s take a closer look to understand the effect of COVID and the changes coming through China borders reopening.

The Chinese citizens transitioned to substantial savings

Chinese households have increased savings from 17% to 33% of their income due to economic uncertainty rather than pent-up demand caused by the COVID-19 pandemic.

According to recent data from China’s central bank, Chinese bank deposits increased by 26.3 trillion Chinese yuan ($3.9 trillion) in 2022, with household savings accounting for 17.8 trillion yuan. China’s strict COVID-19 containment measures drove the increase in savings as it forced many people to remain indoors for long periods, resulting in suppressed consumer spending.

While some excess savings could be spent as “revenge spending,” a significant portion reflects Chinese households’ preference for precautionary savings in bank deposits and housing investments.

Even if consumer spending returns to normal, the uncertainty in the economy could prevent Chinese households from investing in housing or stocks, causing bank deposits to remain high. A household survey by the People’s Bank of China during Q3 of 2022 showed that only 22.8% of respondents wanted to buy more things, while 58.1% preferred to increase their savings.

Although consumption is expected to recover in 2023, Chinese households may maintain higher precautionary savings in the long term due to mounting economic uncertainty.

To encourage spending, the Chinese government must address the cost-of-living crisis that has made Chinese consumers reluctant to spend. This can be achieved by making housing affordable in major cities, offering welfare benefits for low- and middle-income families, and increasing social protection. Excessive household savings could severely impede China’s long-term economic prospects without significantly overhauling its fiscal policy and tax system.

China’s consumption faced a crushing blow in 2022.

In 2022, China’s consumption suffered a significant blow, leading to a surge in excess savings. However, the situation appears to be improving with the country’s mobility index improving and major cities offering consumption vouchers to tap into the pent-up spending desire of consumers.

The graph below shows a decline in total retail sales between 2021-2022.

Beijing has also decided to provide cash subsidies to around 300,000 low-income residents to counter the impact of high food prices. Despite this, consumers seem cautious due to the prevailing economic uncertainty, which has impacted household borrowing demand. The data shows a decline in new loans, condo transactions, and new mortgages, with money trapped in banks, leading to a growing gap between deposits and loans.

China’s trade: A pandemic-proof powerhouse?

Imports and exports remained resilient during the pandemic, only slightly dipping towards the end of 2022. Despite the setbacks, they outperformed pre-COVID levels, highlighting the country’s economic prowess.

The graph presented below shows the movement of China’s trade between 2017 to 2022.

As China’s borders reopen, the import and export trade is expected to hold steady, paving the way for promising economic growth.

Will the monetary and fiscal policies support economic recovery with China borders reopening?

With China borders reopening, monetary and fiscal policies are critical for the government to manage its economy and ensure stability. According to a recent Reuters report, China’s economy is expected to rebound in 2023, driven by a substantial expansion in domestic demand. China’s accommodative fiscal and monetary policies will likely support this growth, designed to spur economic activity and support businesses.

On the fiscal side, the Chinese government has introduced targeted stimulus measures such as tax cuts and infrastructure spending to support businesses and households. The government aims to boost consumer spending and increase investment in critical sectors of the economy.

The People’s Bank of China has implemented monetary policies such as cutting interest rates and reducing reserve requirements for banks to encourage lending and boost liquidity. In 2022, China’s monetary policies included profit transfer to the government, reserve requirement ratio (RRR) cuts, loan prime rate (LPR) cuts, re-lending programs, and medium-term lending facility (MLF) rate adjustments.

In March 2022, the PBOC announced an RMB 1 trillion profit transfer to support local businesses and people. Additionally, RRR and LPR cuts freed up funds for banks to provide more loans to struggling businesses. The People’s Bank of China (PBOC) also launched re-lending programs worth RMB 100 billion for the transport industry and RMB 40 billion for elderly care. The MLF is a critical channel through which the PBOC can inject liquidity into the banking system.

In January 2022, the PBOC reduced the MLF rate to 2.85% on one-year MLF loans worth RMB 700 billion. In addition, in May 2022, the PBOC cut the five-year LPR by a record amount, from 4.6% to 4.45%, to help boost the property sector. These measures aim to increase credit availability and lower borrowing costs for businesses.

China’s policymakers are expected to maintain an accommodative stance to support economic recovery and promote sustainable growth as the country’s borders continue to reopen. China’s policy measures can help to drive economic growth and maintain financial stability in the post-pandemic era by providing targeted support to businesses and households.

China’s monetary and fiscal policies are critical tools that will play a significant role in driving economic growth and maintaining financial stability as the country reopens its borders and emerges from the pandemic.

China’s Manufacturing, Travel, and Housing

Manufacturing: China’s manufacturing sector showed improvement in January as the Caixin/S&P Global manufacturing purchasing managers’ index rose to 49.2, up from 49.0 in December. However, the official PMI survey reported a better-than-expected reading of 50.1, possibly due to its focus on larger state-owned businesses.

Travel: Domestic travel within China is recovering, with 308 million tourism trips made during the recent Lunar New Year period, a recovery to 88.6% of 2019 levels. International travel remains slow, with airlines only offering 11% of 2019 capacity levels, expected to increase to 25% by April.

Housing: Falling home prices, sales, and investments are pressuring China’s economy, with the property market likely to remain weak due to sluggish income expectations and concerns about home delivery. The government is attempting to support the industry by lifting a ban on fundraising via equity offerings for listed property firms. Still, the decline in home prices has become broader, with prices falling in 68 cities on December 22 compared to 57 cities on November 22.

Final Words

China’s borders reopening and travel restrictions being lifted, consumer spending could increase, but economic instability and income disparity may continue influencing people’s buying patterns. The government’s efforts to provide social protection and stimulate expenditure may be beneficial, but individual attitudes and preferences will determine the outcome.

As you can see, there are both pro and con arguments for China borders reopening. The country can alter the global economy significantly. Will China, strengthen or weaken the global economy? Only time will tell.

FAQs

How might China’s border reopening impact global inflation?

According to the Swiss Re Institute research, China’s border reopening may slow the expected decline in global inflation because it could increase demand for goods and services, pushing up prices. This effect could be significantly pronounced if China’s reopening spurs a broader economic recovery.

What are the potential spillover effects of China’s border reopening on commodity prices?

Swiss Re Institute’s research suggests that reopening China’s borders could spillover effects on commodity prices. Specifically, it could increase demand for oil, metals, and agricultural products, increasing prices. This effect could be significantly pronounced if China’s robust economic recovery significantly increases demand.

How might China’s border reopening affect the pace of economic recovery in the global economy?

China’s border reopening could positively and negatively impact global economic recovery. It could increase demand, boosting exports and growth in other countries. However, there is a risk of a COVID-19 resurgence, harming growth. Moreover, a slower-than-expected recovery in China could also dampen global growth prospects.

February 17, 2023

Economy

5 Rights The Digital Personal Data Protection Bill Grants

The Indian Ministry of Electronics and Information Technology (MeitY) published its fourth draft of the proposed privacy law, renamed the Digital Personal Data Protection Bill, 2022, on November 18. Ashwani Vaishnaw, Union Minister for Communications, Electronics, and Information Technology, introduced the bill for public comment.

What is the Digital Personal Data Protection Bill?

The Digital Personal Data Protection Bill comes nearly four to five months after the Supreme Court directed the government to develop a set of data protection rules that prioritize privacy as a fundamental right. The renamed bill is the fourth iteration of the proposed law.

Let us quickly review the key points of the widely debated Digital Personal Data Protection Bill and the rights it confers on individuals.

What data is considered personal under the proposed Digital Personal Data Protection Bill?

According to the Digital Personal Data Protection Bill, personal data is any data that can help identify an individual easily. The data protection bill defines identifiable personal data as information about an individual, such as name, contact information, bank account details, biometric data, etc.

With consent or deemed consent, such personal data may be used by data fiduciaries (any person or a group of persons entrusted with data processing) for lawful purposes such as enforcing a judgment, responding to a medical emergency, and preventing a disaster, and so on.

What are an individual’s rights under the Digital Personal Data Protection Bill?

Right to information about the processing and summary of their data

The Digital Personal Data Protection Bill, 2022 confers certain rights to the Data Principal (the individual whose personal data is being shared) as Data Fiduciaries (individuals or businesses who determine the purpose and method of data processing) have obtained his personal data:

The right to confirm that the Data Fiduciary is processing or has processed the Data Principal’s personal data.
Overview of the personal data being processed as well as the processing activities carried out by the data fiduciary about the data collected.
The identities of all data fiduciaries with whom personal data has been shared.
Any additional information that may be required.

Right to Personal Data Correction and Erasure

The Data Principal has the right to have his/her personal data corrected and erased by applicable laws and in the manner prescribed.

The role of a data fiduciary upon receiving a request for correction and erasure from the data principal shall
- a) Rectify incorrect or misleading personal data.
- b) Complete the incomplete personal data
- c) Update the Data Principal’s personal data
- d) Erase the personal data that is no longer needed unless retention is mandated by law

Right of Grievance Redressal

According to the Digital Personal Data Protection Bill, the data principal has the right to file a complaint with the data fiduciary. If the Data Principal finds the Data Fiduciary’s resolution unsatisfactory, or if he or she does not receive a response even after seven days, the complaint can be escalated to the Board in the manner as prescribed.

Right to Withdraw Consent

The Digital Personal Data Protection Bill defines the consent of a Data Principal as a specific, clear, informed, and unambiguous indication of his/her wishes. It should be a positive action indicating approval of processing personal data for a specific purpose.

Where consent is given for personal data, the Data Principal reserves the right to withdraw consent at any time. The consequences of such withdrawal shall be borne solely by the Data Principal, but the withdrawal shall in no way affect the lawfulness of the data processed before the withdrawal. Furthermore, withdrawing consent should be as simple as giving consent.

Right to Nominate

According to the Digital Personal Data Protection Bill, a Data Principal shall have the right to nominate any other individual who shall, in the event of the Data Principal’s death or mental or physical infirmity, exercise the Data Principal’s rights by the provisions of this Bill.

Duties of an individual under the proposed Digital Personal Data Protection Bill

While giving Data Principals specific rights, the Digital Personal Data Protection Bill also has certain duties an individual must abide by:

Assuring the Data Principal complies with all relevant legislation while exercising his or her rights under this Law.
No individual must lodge a false complaint/grievance with the Data Fiduciary or the Board.
Under no circumstances shall the individual/Data Principal misrepresent any personal data related to proof of identity, address, or employment. No attempt shall be made to conceal any material information or to impersonate another person.
The individual must provide only certifiable and authentic information or documents when exercising the right to correction or erasure.

Key Takeaways

The Digital Personal Data Protection Bill 2022 draft bill envisions the establishment of Data Protection Boards of India to determine non-compliance with the draft Bill’s provisions, impose penalties for such non-compliance, and take action by the provisions of the Bill.

When passed, a well-designed Digital Personal Data Protection Bill will provide a legal foundation for citizens’ entitlements by clearly defining the scope of the basic right to privacy and the Data Fiduciaries. Though it still has some gaps in safeguarding the citizens from a data breach, when it is revamped to remove the flaws and fully implemented, India’s data protection will be on par with that of developed nations.

FAQs

What are SDFs or Significant Data Fiduciaries in Digital Personal Data Protection Bill?

A significant data fiduciary is a data fiduciary, as the name implies. Still, they fall into a “significant” category according to data privacy and cybersecurity authorities depending on the type of personal data, its risks, and its sensitivity. Another critical point is that data fiduciaries in the significant category must meet the special accountability requirements detailed in the personal data protection bill.

What are the exemptions of the Digital Personal Data Protection Bill?

The exemptions to this Bill include situations where-
● Personal data processing is required to enforce any legal right or claim
● Personal data is processed to prevent or prosecute any crime or law violation.

February 8, 2023

Economy

6 Key Highlights Of Economic Survey 2022-23 You Must Know

The Economic Survey is an annual report published by the Government of India that reviews the country’s financial developments over the previous fiscal year. It also examines trends in various sectors of the economy, such as agriculture, industrial production, export, import infrastructure, and fiscal deficit, among many others.

Overview of the Economic Survey

According to the Economic Survey 2022-23, the year 2022 has been particularly intriguing, with India completing its full recovery from the pandemic ahead of many other countries, despite the challenges of a depreciating rupee, rising global commodity prices, and surging inflation.

The Economic Survey presented by Finance Minister Smt Nirmala Sitaraman forecasts 6.5% real GDP growth in FY 2024. These projections correspond to statistics provided by multilateral agencies such as the World Bank and the IMF and domestic agencies such as the RBI and ADB.

*Source: Press Information Bureau (PIB), GOI*

Let us take a bird’s view of the Economic Survey 2022-23, which discusses the six key highlights driving future economic growth.

Credit Growth

Credit growth has been wide-ranging across sectors, with retail credit primarily driving growth due to rising demand for home loans.

According to the Economic Survey, the Non-food bank credit growth accelerated to 15.3% year on year in December 2022. It indicates an acceleration in current economic activity growth with an expectation of momentum continued in the future.

According to the Economic Survey 2022-23, the credit growth in the Micro, Small, and Medium Enterprises (MSME) sector has been remarkably high, at more than 30.6% on average between January and November 2022. Thanks to the Union government’s extended Emergency Credit Linked Guarantee Scheme (ECLGS), Production-linked incentive scheme, and improvement in capacity utilization.

A rebound in credit-fueled growth in the services sector to NBFCs, commercial real estate, and trade industries. Increasing credit disbursal to Non-Banking Financial Corporations (NBFCs) was primarily attributed to improved asset quality and increased profitability.

The dramatic industrial credit growth implies brighter prospects for CAPEX investments. The PLI schemes are intended to increase manufacturing capacity, boost exports, reduce reliance on imports, and create skilled and unskilled labor jobs. Despite the global headwinds, the credit growth in India should continue to grow, supported by resilient demand conditions.

Current Account Deficit (CAD)

Per the Economic Survey, India recorded a Current Account Deficit (CAD) of 3.3 % of GDP in H1FY23 compared to 0.2% in H1FY22. This increase is triggered by an uptick in the merchandise trade deficit and higher net investment income outgoing.

The reason for the widening of CAD and the high inflationary pressures in net importing countries like India is the pandemic-induced shrinkage in production worldwide and the inflation the Russian-Ukraine conflict fuelled. It led Central Banks around the World, influenced by the Federal Reserve, to hike their interest rates to fight inflation.

The US Fed’s rate hike drew capital into US markets, causing the US Dollar to rise against most currencies. It led to the widening of CAD. If the current account deficit grows, the rupee could depreciate.

A domestic shipping and shipbuilding industry can help reduce freight costs and forex outflows, lowering the current account deficit.

Export Outlook

According to the Economic Survey, exports stood at a record high of $422 billion in FY 22. In a global slowdown marked by slowing international trade, a downturn in Indian exports is unavoidable. Significant measures to evolve the whole eco-system in an export-friendly direction over time would include-

The National Logistics Policy would reduce the cost of internal logistics to encourage Indian exports.

In 2022, India signed several Free Trade Agreements with the countries such as UAE and Australia that would create opportunities for exports at concessional tariffs or no tariffs barriers on goods and services.

In July 2022, RBI allowed invoicing, payment, and settlement of exports in Indian Rupees (INR), thereby reducing the currency risk for Indian businessmen. Safeguarding the currency volatility not only lowers the cost of doing business but also allows for better business growth, increasing the chances of Indian businesses growing globally.

Because of the rise in global crude oil prices, petroleum products remained the most exported commodity in FY22 and April-December 2022, followed by gems and jewelry, organic and inorganic chemicals, and drugs and pharmaceuticals.

Digital Infrastructure Roadmap

In the wake of COVID-19, when physical interactions have been restricted, the role of Digital Infrastructure has been significant in the country’s socioeconomic development. The economic Survey 2022-23 outlines a few significant developments in the sphere of digital infrastructure-

Under the ambitious flagship program Digital India launched in 2015, the rural and Urban teledensity gap has significantly improved.

The government has introduced Account Aggregator, a global techno-legal framework that gives individuals complete access to essential services such as finance, health, education, and skills. Allows you to securely share the data with any regulated third-party financial institution of your choice with due consent.

Low-cost accessibility, the success of citizen-centric services such as the Unified Payments Interface (UPI), massive adoption and reach (DigiLocker, MyGov), and the vaccine journey via Co-Win are all significant and powerful milestones in India’s digital infrastructure journey.

To summarize, the convergence of physical and digital infrastructure will be a dominant attribute of India’s future growth story.

Agri and Allied industries

According to the Economic Survey, the agriculture sector in India has grown at a 4.6% annual rate over the last six years. The key highlights of the survey related to agriculture and allied industries include the following-

The sturdy performance can be credited to the government’s efforts to promote farmer-producer organizations, encourage crop diversification, and boost agricultural productivity through mechanization assistance and the establishment of the Agriculture Infrastructure Fund.

Providing financial assistance to farmers to improve their weather resilience through programs such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). The government also promotes allied agricultural activities to allow the farmers to diversify their income.
India is rapidly emerging as a net exporter of agricultural products, and agricultural exports reached an all-time high of $50.2 billion in 2021-22.

The agricultural sector remains critical to India’s growth and employment trajectory and therefore needs to be encouraged through an affordable, inclusive, and timely approach to providing income support and adequate insurance coverage.

Recovery from COVID-19

Economic Survey 2022-23 says that the last three years have been extremely difficult for the real estate market. Due to the increasing uncertainty, health concerns, and stay-at-home orders, people delayed purchases.

However, thanks to government initiatives such as lowering home loan interest rates and bestowing subsidies and incentives, the housing sector has recovered from the pandemic’s impact.

In 2020, the government launched the Atmanirbhar Bharat Rozgar Yojna (ABRY) to stimulate the economy and increase employment generation in the post-Covid-19 recovery phase. It also incentivized the creation of new jobs, social security benefits, and restoring jobs lost during the pandemic.

The Economic survey describes how the government guided the economy through financial stress, repairing and restoring corporate, banking, and non-banking balance sheets.

Key Takeaways

According to the Economic Survey 2022-23, India, like the rest of the World, faced numerous challenges, such as the pandemic, geopolitical conflicts, soaring commodity prices, etc. However, India has fared better than many other countries in dealing with these challenges.

You can expect lower macroeconomic volatility in 2023 than in the previous fiscal year because the inflation risks from global commodity prices in advanced countries are likely lower.

Economic Survey states that we live in a new normal in which the global economy is still recovering from the effects of the pandemic and persisting geopolitical conflicts. Because of the dedicated support for infrastructure creation through increased capital expenditure and strong macroeconomic fundamentals, India could effectively navigate the situation.

FAQs

What is Economic Survey?

The Economic Survey of India is a comprehensive report on the country’s economic performance during the previous fiscal year. It contains information on all major government initiatives, key policies, and outcomes.

Who prepares the economic survey, and when is it presented?

The Department of Economic Affairs (DEA) prepares the Economic Survey under the watchful eye of the Chief Economic Advisor (CEA). It is presented a day before the actual budget is presented.

Does the Economic Survey affect the Union Budget?

Although the economic survey results are kept in the background while drafting the Union Budget, they do not necessarily affect each other. The government is not required to present the Economic Survey or to implement its recommendations. If it desires, it can even reject all of the suggestions in the document.

February 6, 2023

Economy

5 Reasons Why Electric Vehicles Hub India Is Possible In The Next Decade

The EV market in India is expected to reach $47 billion by 2026, reducing our reliance on fossil fuels significantly over time. This advancement will increase energy efficiency and lower carbon emissions in the coming years. Government initiatives and eco-consciousness among buyers have opened doors to boundless opportunities for the emerging electric vehicles hub India.

Wondering why EV? What prompted India to be so bullish on the EV industry?

India currently has the fifth-largest automotive industry in the world, and it wants to move up to the third position. India’s transport sector is the largest fossil fuel user, accounting for 33% of our crude oil consumption. Consequently, it is the country’s second-largest source of CO2 emissions, accounting for almost 11% of total CO2 emissions from fuel combustion.

Catalyzing India EV potential to increase energy security and mitigate the negative environmental impacts of ICE (Internal Combustion Engine) vehicles is a must. Furthermore, focusing on the EV sector can open up new opportunities in EV battery and charging infrastructure while relieving the pressure on oil imports.

Electric Vehicle Hub India Future

With looming oil crisis, growing global warming, and increasing ailments due to poor air quality have triggered the demand for EVs in India.

Vehicle Category-wise market share

More than 10 million EV vehicles are expected to be sold in India by 2030, with the two-wheeler category driving most of the growth. In India, the two-wheeler segment currently dominates the EV industry.

Among other measures, proper collaborative actions, reliable charging infrastructure, direct subsidies, further tax incentives, and easier norms for PLI eligibility undoubtedly unlock India EV potential.

5 Reasons Why Electric Vehicles Hub India is Possible

Governments worldwide are providing subsidies to encourage more consumers to choose electric vehicles over fossil-fuel-powered vehicles.

Lower Operating and Maintenance cost

The decision to purchase any vehicle is primarily influenced by two factors: maintenance costs and operating costs. Unlike gasoline vehicles, electric cars have very few moving parts that break or need to be replaced. Furthermore, you spend less on fuel/energy, making it a very cost-effective option.

Eco-Friendly

Electric Vehicles have zero tailpipe emissions, allowing you to reduce your carbon footprint significantly. It can help save our environment from climate change and reduce the health issues caused by pollution.

Less Driving Fatigue

With electric vehicles, you can enjoy a stress-free and noise-free drive as these vehicles are gearless. In addition, the motors are less noisy than combustion engines and their exhaust systems. Therefore, less noise can help to reduce noise pollution.

Hassle-Free Charging

With 1800 electric vehicle battery charging stations already in place and many more on the way, charging your battery will be simpler than standing in queue for petrol/CNG refills. Using charging equipment, you can recharge your vehicle from the comfort of your home.

Tax Benefits

If you take a car loan to buy an electric vehicle, you can claim a deduction of Rs. 1 lac under Section 80 EEB on the interest paid. The government has reduced the GST on electric vehicles from 12% to 5%. The new Green Tax Policy requires you to pay road tax only when you renew your registration certificate after 15 years.

India’s Challenges in the transition to electric vehicles

Lack of Charging Infrastructure

Availability of land for charging infrastructure building and electricity grid readiness are two critical bottlenecks to deep electric vehicle penetration in India.

Supply Chain Challenges

The reliance on imported automobile components such as lithium-ion batteries and semiconductors discourages companies interested in investing in the electric vehicles industry. Moreover, according to experts, battery shortages will reduce global production capacity by more than 20 million between 2020 and 29.

Battery Life

EV batteries are designed to last for a maximum of 6-8 years. As a result, when the battery’s life expires, the user is forced to purchase a new battery, which costs nearly 75% of the total vehicle cost. In the long run, such high battery costs could affect buyer psychology.

Government policies to become a global EV hub

One of the key factors impeding the market penetration of EVs in India is the low acceptance rate.

FAME- I & II

These schemes were launched in 2015 and 2019 to encourage the adoption of EVs in India and to reduce the use of gasoline and diesel in automobiles. It focused on supporting 5,00,000 e-3Wheelers, 7000 e-Buses, 55,000 e-passenger vehicles, and over a million 2-Wheelers with a budget of Rs. 10,000 crores.

PLI Scheme

Launched in June 2021 under the flagship mission “Atmanirbhar Bharat,” the PLI scheme was designed to entice domestic and international investors to invest in India’s Giga Scale ACC manufacturing facilities. Total Rs. 18,100 crores to be paid out over five years after the production facility becomes operational.

Special E-Mobility Zone

Allocating mobility zones for electric vehicles will aid in preventing overcrowding caused by private cars. This, in turn, will help to increase the EV market share by encouraging more consumers to buy or rent one.

Lowering of Custom Duty

The government has lowered import duty on vital raw materials to give a competitive edge to domestic production of EV batteries. Custom duty on Nickel Ore has been reduced from 5% to 0%, Nickel Oxide from 10% to 0%, Ferro Nickel from 15% to 2.5%

Key Takeaways

India has become one of the most alluring destinations for investment in the manufacturing sector. Legacy players are catching speed, and many enthusiastic start-ups are ready to jump on the EV bandwagon. In the next decade, India can become the electric vehicle hub with a well-connected roadmap to build a sustainable and intelligent e-mobility landscape.

FAQs

What are Electric Vehicles?

Vehicles that deploy electric motors instead of ICE for power generation are called EVs.

What are the types of Electric Vehicles?

EVs can be Plug-in, Space Rover, Off-and On, Airborne Powered, Range-extended, Railborne, or Seaborne. And Electrically Powered Spacecraft types.

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Top 10 Announcements at the Gujarat Global Summit

Summit Achievements

FAQs

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Need For Green Businesses

Understanding Green Business

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Exploring Green Business Models

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Introduction

Aadhaar-PAN Linking Charges Explained

Understanding Late Fees

Why is Aadhaar and PAN card Linking Important?

Here’s a step-by-step guide on how to link your PAN with Aadhaar online:

FAQs

What is the late fee for missing the Aadhaar-PAN linking deadline?

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Chandrayaan 3 Setting Records For India and more

Impact of India’s successful Chandrayaan 3 Moon Mission

1. Creating Job opportunities in Space tech

2. Increasing Opportunities for Startups

3. Amplified focus on Space tech and infrastructure

4. Foster Education

5. Growth of the Research & Development sector

6. Augmenting the National Security

7. International Collaborations

8. Bolstering the India’s Soft Power

9. Entering the Moon economy

FAQs

What was the budget of the Chandrayaan 3 mission in Indian rupees?

How will the Chandrayaan 3 mission impact India?

When was Chandrayaan 3 launched?

UPI ATM: Redefining Accessibility

Conversational UPI Transactions: A Natural Interaction

FAQs

Can I use UPI ATM at any ATM?

Can I set up a voice command in multiple languages for NCPI’s Conversational Feature?

Can I use UPI ATM for international transactions?

What if my voice command is not recognized?

Are there any additional charges for using UPI ATM?

Semicon India 2023

Global Semiconductor Revenue by Segment

India’s Expanding Semiconductor Market

Explosive Growth in India’s Digital and Electronic Manufacturing

Global Industry Gathering at Semicon India 2023

AMD’s Bold Investment in India’s Semiconductor Future

Semicon India 2023: Catalysing India’s Chip Landscape

Foxconn Chairman’s Optimism on India’s Potential

India’s Chip Industry: A Bright Future Ahead

Sahasra’s Exciting Journey

Final Words

FAQs

What are the opportunities for foreign investors in the Indian semiconductor industry?

What are the risks of investing in India’s semiconductor industry?