Finance Minister Nirmala Sitharaman will present her 8th straight Budget and all eyes will be on the much-expected tax relief for the middle class. Sitharaman had in her first Budget in 2019 replaced the leather briefcase -- which had been in use for decades for carrying Budget documents -- with a traditional 'bahi-khata' wrapped in red cloth.
Foreign investors continue to show confidence in the country's equity market, infusing Rs 14,167 crore so far this month, largely driven by favourable global cues and robust domestic fundamentals. Notably, this inflow has come despite the ongoing military tensions between India and Pakistan.
The Budget should undertake further reductions in import tariffs and seriously consider an announcement of India's intention to join one or both of the two Asian mega-regional free trade agreements, suggests Shankar Acharya, former chief economic adviser to the Government of India.
The Reserve Bank of India on Thursday projected a GDP growth of 7 per cent for 2024-25 financial year, which is lower than the 7.3 per cent expansion estimated for the current fiscal. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said rural demand continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex.
The India Meteorological Department (IMD) has predicted above-normal rainfall across India in June, with most parts of the country likely to experience normal to below-normal maximum temperatures. The IMD also anticipates above-normal minimum temperatures across most of the country, except for some parts of central India and the adjoining south peninsula. The southwest monsoon reached Kerala on May 24, marking its earliest arrival over the Indian mainland since 2009. The monsoon is crucial for India's agriculture-dependent economy, providing vital water for crops and supporting drinking water and hydropower generation.
There are challenges galore before him, and it is not going to be easy. In the next four years, he has to conjure a system that changes the optics about him and the BJP both nationally and internationally so that he can ride back on his own, claim the top slot, and not have to lean on a coalition, asserts Ramesh Menon as Modi 3.0 completes a year in power.
On the back of robust tax collection, the ratio of direct taxes to gross domestic product (GDP) this financial year is likely to be the highest in this century so far. This, along with strong goods and services tax (GST) collection, may drive up receipts from central taxes as a proportion of GDP to the highest level or close to the highest since 2008-09 despite subdued excise and customs duty receipts. This will be due also to lower nominal GDP projected in the first advance estimates for 2023-24.
As per the first advance estimates of national income released by the National Statistical Office (NSO) on Friday, the manufacturing sector output is estimated to grow to 6.5 per cent in the current fiscal compared to 1.3 per cent in 2022-23. Similarly, mining sector growth is estimated at 8.1 per cent in the current fiscal against 4.1 per cent in 2022-23.
India fully utilised its military modernisation budget in 2024-2025 -- the first time in five years -- and signed a record Rs 2 trillion defence contracts.
The cumulative wealth of 284 Indian billionaires is a third of the country's GDP, a report said on Thursday.
Export-led Indian IT sector is not directly hit by Trump's tariff order on goods, but there could be worrisome indirect bearings on it arising out of possible slowdown in decision-making and GDP growth in America over higher tariffs, which may then cloud demand from specific verticals, according to some analysts.
'Will this near-war, India's strongest military response so far, buy India another seven years of deterrence?' asks Shekhar Gupta.
Fitch Ratings on Monday said India's pace of debt reduction is gradual, leaving room for a downside risk to sovereign rating in the eventuality of a significant economic shock. However, the rating agency expressed confidence in India's ability to stick to its medium-term fiscal framework, which aims to reduce debt and bring it on a downward trajectory over time.
The India Meteorological Department (IMD) has predicted above-normal rainfall for the upcoming monsoon season in India (June to September). The cumulative rainfall is estimated to be 105 percent of the long-period average. The IMD has also ruled out the possibility of El Nino conditions during the entire season. The monsoon is crucial for India's agriculture sector, which supports the livelihood of a significant portion of the population and contributes substantially to the country's GDP. However, while the prediction of normal rainfall brings relief, climate change is expected to cause variations in rainfall distribution.
India's economic growth accelerated to 8.4 per cent in the third quarter of 2023-24, mainly due to good performance by the manufacturing, mining & quarrying and construction sectors. The Indian economy recorded a growth of 8.4 per cent in the third quarter of this fiscal (October-December 2023), according to data released by the National Statistical Office (NSO) on Thursday.
The Reserve Bank of India on Friday raised the GDP growth projection for the current fiscal to 7 per cent from 6.5 per cent earlier on buoyant domestic demand and higher capacity utilisation in the manufacturing sector. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das, however, flagged protracted geopolitical turmoil and global economic fragmentation as risks to the growth outlook. The RBI kept interest rates unchanged at 6.5 per cent in Friday's monetary policy statement.
Domestic rating agency Icra on Monday revised its FY24 GDP growth forecast to 6.5 per cent from 6.2 per cent earlier. However, the revised forecast is still much lower than the Reserve Bank of India's (RBI's) 7 per cent real Gross Domestic Product (GDP) growth estimate for the ongoing fiscal. Earlier this month, the RBI had revised upwards its GDP estimate to 7 per cent from 6.5 per cent, calling the revised number a "conservative" one.
Azmi said during Aurangzeb's reign, India's border reached Afghanistan and Burma (Myanmar).
Continuing on the fiscally prudent path, the Modi government in the interim Budget refrained from announcing populist measures, which will help it trim the fiscal deficit to 5.1 per cent of the GDP next fiscal and 4.5 per cent in FY26.
Whether nominal or real, India's investment rate needs to increase by 3 to 4 percentage points of GDP to support 8 per cent real growth, recommends Nikhil Gupta.
The repo rate cut by 25 basis points by the monetary policy committee (MPC) of RBI announced Friday will give a long-awaited relief on interest rates and also be supportive of economic growth, according to experts. Repo rate is the interest rate at which the RBI lends money to commercial banks.
India's service sector activity accelerated slightly in April largely driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment, a monthly survey said on Tuesday. The seasonally adjusted HSBC India Services PMI Business Activity Index reached 58.7 in April, up from 58.5 in March, indicating a sharp and stronger expansion in service sector output.
Discrepancies in computation of advance estimates of the country's Gross Domestic Product for 2023-24 stood at Rs 2.59 lakh crore as against (-) Rs 3.80 lakh crore in 2022-23 and (-) Rs 4.47 lakh crore in 2021-22, according to National Statistical Office (NSO). On Friday, the NSO released its first advance estimates of national accounts which showed that the Gross Domestic Product (GDP) or Indian economy will grow at 7.3 per cent in 2023-24, slightly higher than 7.2 per cent in 2022-23.
Geopolitical tensions, trade policy uncertainties, volatility in international commodity prices and financial market uncertainties pose considerable risks to India's economic growth in the coming year, the finance ministry cautioned on Wednesday. "Global trade continues to be affected by uncertainty in the policy environment... tariff-related developments in multiple countries have heightened trade-related risks, affecting investment and trade flows globally.
The US Fed interest rate decision, trading activity of foreign investors and quarterly earnings from corporates would largely drive the momentum in the equity market this week, analysts said. Escalating tensions between India and Pakistan over the Pahalgam terror attack will also remain on investors' radar, they added.
Prime Minister Narendra Modi officially commissioned the Vizhinjam International Seaport on Friday in Thiruvananthapuram in the presence of Chief Minister Pinarayi Vijayan and senior Congress leader Shashi Tharoor, whose presence at the inauguration, Modi said, will give 'sleepless nights' to many.
The government in FY26 Budget should announce an "effective" personal income tax cut to support consumption and demand, Barclays said on Thursday. In its FY25-26 Union Budget preview, Barclays said the key ask from the Budget, to be presented on February 1, is to support growth while adhering to fiscal consolidation path.
India will become the world's third largest economy by 2026 as its GDP in current dollar terms will reach $5 trillion in that year and further rise to $5.5 trillion in 2027, former Niti Aayog vice chairman Arvind Panagariya said on Friday. Delivering the 18th C D Deshmukh Memorial Lecture titled 'India at 125: Reclaiming the Lost Glory and Returning the Global Economy to the Old Normal', he said it is unlikely that GDP in current dollar terms of either Germany or Japan will cross $5 trillion-mark in the coming three years. Japan will have to sustain a growth rate of 3.5 per cent in current dollar terms to reach $5.03 trillion in 2027 from its 2022 level of $4.2 trillion, he said.
'For the first time in this country, perhaps the first time anywhere, we are going to use backwardness index.' 'It is a fundamental shift in the discourse in the country's social justice.'
For India to transform into a high-income country with a projected gross domestic product (GDP) of $23-35 trillion, will need a sustained annual growth of 8 per cent to 10 per cent. This will be powered by India's demographic dividend, technological innovation, and sectoral transformation, according to the "India@2047: Transforming India Into A Tech-Driven Economy" report by Bain & Company and Nasscom. By 2047, the services sector is expected to contribute 60 per cent of India's GDP, while manufacturing will account for 32 per cent, both playing a pivotal role in economic expansion.
Retail inflation eased to a nearly six-year low of 3.16 per cent in April mainly due to subdued prices of vegetables, fruits, pulses, and other protein-rich items, creating enough room for the Reserve Bank to go for another round of rate cut in the June monetary policy review. The Consumer Price Index (CPI) based inflation was 3.34 per cent in March and 4.83 per cent in April 2024. It was 3.15 per cent in July 2019.
S&P Global Ratings on Wednesday said the impact of the US reciprocal tariff will be limited on India as the economy is domestically oriented with less reliance on exports. YeeFarn Phua, Director, Sovereigns and International Public Finance Ratings, Asia-Pacific S&P Global also said India will clock a 6.7-6.8 per cent GDP growth over the next two years.
The prospect of protracted uncertainties in the global economic landscape not only pose a risk for India's growth outlook in 2025-26, but are also likely to dent the private sector's capital raising and investment plans, the finance ministry averred on Tuesday, cautioning the country's corporates that the era of 'easy pickings' was over.
India's current account deficit declined sharply to 1 per cent of the GDP or $8.3 billion in the second quarter of this financial year, mainly due to lower merchandise trade deficit and growth in services exports, according to a RBI data released on Tuesday. The current account deficit (CAD), which represents the difference between the total amount of money sent abroad and money received from overseas across the economy, was 3.8 per cent of GDP or $30.9 billion in the July-September quarter in 2022-23. CAD was $9.2 billion or 1.1 per cent of GDP in the first quarter (April-June) of the current financial year 2023-24.
'We have to retain some fiscal headroom without compromising on the promised fiscal consolidation roadmap.'
'...how do they consume and contribute to the GDP?'
'I believe that the overall demand for commercial vehicles will improve, even though there is a slowdown in the GDP.'
Investors should avoid making drastic changes to their asset allocation during a market correction.
Prime Minister Narendra Modi asserted on Tuesday that India's water will no longer flow outside the country but will be utilized in the nation's interest, a statement seemingly directed at Pakistan following his government's decision to put the Indus Waters Treaty in abeyance after the Pahalgam terror attack. Addressing the ABP Network's 'India@2047' Summit, Modi emphasized his government's focus on interlinking rivers, noting that water used to be a source of conflict among states, before alluding to India's stance against Pakistan while discussing water. He highlighted the finalization of the India-UK free trade agreement as a historic milestone and underscored the importance of prioritizing national interest for achieving objectives and realizing the country's potential. Modi highlighted the country's growth and development under his government's rule, emphasizing its focus on welfare schemes and digitalization. He reiterated his government's commitment to 'Nation First' and pointed to the recent reforms undertaken, including the new Waqf law and the ban on triple talaq, which he said were aimed at benefiting the marginalized sections of society.
While this will incur a revenue loss amounting to 0.2 per cent of GDP, it will provide a strong boost to consumer sentiment and spending, points out Rajani Sinha.
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