Trading in the equity market will largely depend on two major events this week - general elections result and the RBI interest rate decision - analysts said, adding that the benchmark indices may rally on Monday on exit polls' prediction of a massive win for the BJP-led NDA and strong GDP data. Exit polls on Saturday predicted that Prime Minister Narendra Modi will retain power for a third straight term, with the NDA expected to win a big majority in the polls. Counting of votes will take place on June 4.
The pre-budget Economic Survey, which is tabled in Parliament ahead of the Union Budget to present the state of the economy and suggest policy prescriptions, quite often misses on the GDP forecast, sometimes by a significant margin. This time, Finance Minister Nirmala Sitharaman will table the Economic Survey for 2021-22 in the Lok Sabha on Monday soon after the President's address to both Houses of Parliament. She will present the Union Budget for the next financial year beginning April 1, 2022, on Tuesday.
'India's output contraction in the previous year was among the worst in the world!'
Chief Economic Advisor V Anantha Nageswaran on Thursday said the economy is expected to grow at 6.5 per cent in the current fiscal notwithstanding deficient rains in August. India recorded economic growth of 7.8 per cent in the April-June quarter of 2023-24 against 13.1 per cent in the year-ago period. India's economy in Q1 grew at the fastest pace in a year, on the shoulders of a boost in capital expenditure both at central and state levels, along with stronger consumption demand, especially in rural areas, and improved performance in the services sector, he said.
Stock markets will be driven by domestic inflation data, ongoing quarterly earnings from corporates and global trends this week, analysts said. News flows around the general election would also be tracked by investors, market experts said.
The Reserve Bank of India on Wednesday decided to keep the policy rate unchanged for the tenth time in a row but changed its stance to 'neutral' that may lead to a cut in the forthcoming policies. RBI maintained status quo despite the US Federal Reserve lowering the benchmark rates by 50 basis points last month.
The Indian economy is likely to post better than anticipated growth in the second quarter (July-September) owing to robust urban consumption and expansion in services, a Business Standard analysis of high-frequency indicators showed. While gross domestic product growth in the September quarter is expected to come below the 7.8 per cent print in the June quarter due to a favourable base fading, analysts say the print will be much closer to 7 per cent than the 6.5 per cent anticipated earlier. While the Reserve Bank of India (RBI) had estimated 6.5 per cent growth for July-September, last month Governor Shaktikanta Das said the growth figure would surprise on the upside.
The challenge for the RBI in 2024 is likely to be less about containing elevated inflation and more about curbing excessive financial market exuberance and a 'problem of plenty', notes Sajjid Chinoy, Chief India Economist JP Morgan.
Indian food services sector is expected to grow at a CAGR (compounded annual growth rate) of 8.1 per cent between 2024 and 2028 on the back of rapid urbanisation, robust GDP growth, a rising younger population, and greater exposure among consumers, said a new report. The India Food Services Report-2024, brought out by the National Restaurants Association of India (NRAI), states that the sector contributes 1.9 per cent to India's GDP and is projected to grow to Rs 7.76 trillion by 2028 from Rs 5.69 trillion currently.
'Healthcare is not an industry.' 'The government is only encouraging insurance as they are not able to provide healthcare to people.' 'Opening new medical colleges is not what is needed.' 'You have to invest in public sector hospitals.' 'You cannot hand over healthcare to the private industry.'
The government will provide Rs 11.11 lakh crore for capital expenditure for 2024-25 and introduce viability gap funding to spur private investment in infrastructure, Finance Minister Nirmala Sitharaman said on Tuesday. Presenting the Union Budget for FY2024-25, she said that the government will endeavour to maintain strong fiscal support for infrastructure over the next five years, in conjunction with imperatives of other priorities and fiscal consolidation.
Domestic ratings agency Icra on Monday forecast a 2 per cent GDP growth in the fourth quarter of 2020-21, and a 7.3 per cent contraction for the full fiscal year. From a GVA or gross value added perspective, the agency pegs Q4 growth at 3 per cent and the full year contraction at 6.3 per cent. According to the agency, the 2 per cent projected GDP growth will help the economy avoid a double-dip recession as indicated by the National Statistical Office (NSO) for Q4. Icra's projection is better than the 8 per cent contraction forecast by the NSO as it sees Q4 growth at only 1.1 per cent.
India has already become the world's fifth largest economy in the 75th year of Independence and will reach the $3.5 trillion mark by end-March, said the Economic Survey tabled in Parliament on Tuesday. In real terms, the economy is expected to grow at 7 per cent for the year ending March 2023. This follows an 8.7 per cent growth in the previous financial year.
Dr Nagesh Kumar, one of the three new MPC members, wanted the MPC to reduce the repo rate by 25 basis points to 6.25%.
Dominic Xavier asks if it is right to blame coronavirus and the lockdown for India's economic decline.
Hammad Albalawi, head of Saudi Arabia's 2034 World Cup bid unit, said his country welcomes all visitors, including LGBTQ people and their bid to host the 48-team showpiece event has nothing to do with 'sportswashing' their human rights record.
'A 10 to 15 per cent allocation to gold in portfolios reduces risk without compromising on potential returns.'
The country's gross domestic product (GDP) is expected to grow at around 18.5 per cent with an upward bias in the first quarter of the current financial year, according to SBI research report Ecowrap. This estimate is lower than the Reserve Bank of India's GDP growth projection of 21.4 per cent for the April-June quarter. "Based on our 'Nowcasting' model, the forecasted GDP growth for Q1 FY22 would be around 18.5 per cent (with upward bias)," the report said. Higher growth in Q1 FY22 is mainly on account of a low base.
Prime Minister Narendra Modi's goal of making India a high-income economy by 2047 is unlikely to be achieved, but the country should become an upper middle-income nation by then, Financial Times chief economics commentator Martin Wolf said on Friday. Wolf further said that India would also become a superpower by 2047. "India wishes to become a high-income country by 2047.
'Whether I am optimistic or pessimistic is not the issue; I am just going by the evidence available.' 'The Indian economy and financial sector are now well-placed and very resilient in dealing with any kind of spillover coming from the external world.'
India's net oil import bill could widen to $101-104 billion in current fiscal from $96.1 billion in 2023-24 and any escalation in the Iran-Israel conflict could impart an upward pressure on the value of imports, ICRA said on Tuesday. The domestic rating agency said based on its analysis, lower value of Russian oil imports is estimated to have led to savings of $7.9 billion in 11 months (April-February) of 2023-24, up from $5.1 billion in 2022-23.
S&P Global Ratings on Friday said it will watch the fiscal numbers for the next 1-2 years, besides pro-growth policies of the new government, before deciding on India's sovereign rating upgrade. S&P, which earlier this week upgraded India's outlook to positive while retaining the sovereign rating at BBB-, expects the new government to continue with pro-growth policies, infrastructure investment and commitment to fiscal consolidation.
All eyes will be on whether Sitharaman will deliver a populist budget leaving more money in hands of the common man or push the reform agenda by staying on the fiscal glide path to lower the fiscal deficit to 4.5 per cent of GDP by 2025-26.
Indian companies are generating more cash than ever. The net cash flow from listed firms' operations hit a new high of Rs 11.1 trillion in financial year 2023-24 (FY24), crossing the Rs 10-trillion mark for the first time, according to the Centre for Monitoring Indian Economy (CMIE) data going back to 1990-91. The FY24 figure represents a 19.3 per cent jump over the previous year, even as quite a few companies are yet to release their numbers.
American brokerage firm Morgan Stanley on Thursday sharply cut its India FY23 real GDP growth estimate to 7.9 per cent, mainly due to the impact of the Russia-Ukraine conflict on oil prices. Analysts at the brokerage also raised their inflation forecast to 6 per cent - the upper end of the tolerance band for the RBI - and flagged stagflation risks because of the ongoing events. "We believe that the ongoing geopolitical tensions exacerbate external risks and impart a stagflationary impulse to the economy," they said. It can be noted that stagflation involves a stagnancy in output or growth, coupled with high inflation.
IT and interest rate-sensitive bank, realty, and auto stocks ended with sharp gains.
Moody's Investors Service on Thursday slashed India's economic growth projection for 2022 to 7.7 per cent, saying that rising interest rates, uneven monsoon, and slowing global growth will dampen economic momentum on a sequential basis.
Fiscal deficit for 2020-21 was at 9.3 per cent of the gross domestic product (GDP), lower than 9.5 per cent estimated by the finance ministry in the revised Budget estimates, according to the CGA data. Unveiling the revenue-expenditure data of the Union government for 2020-21, the Controller General of Accounts (CGA) on Monday said that the revenue deficit at the end of the fiscal was 7.42 per cent.
Fitch Ratings has revised India's GDP forecast to minus 9.4 per cent in the current fiscal year from a previously projected contraction of 10.5 per cent after the economy staged a sharper rebound in the second quarter. In its Global Economic Outlook, Fitch said the coronavirus-induced recession inflicted severe economic scarring and the country needs to repair balance sheets and increase caution about long-term planning. "We now expect GDP to contract 9.4 per cent in the fiscal year to end March 2021 (plus 1.1 percentage point) followed by plus 11 per cent growth (unchanged) and plus 6.3 per cent growth in the following years," the rating agency said.
Fitch Ratings on Wednesday said India's high fiscal deficit would pose a challenge in lowering the debt to GDP ratio, which is expected to rise above 90 per cent in the next five years. It said India entered the pandemic with little fiscal headroom from a rating perspective. Its general government debt/GDP ratio stood at 72 per cent in 2019, against a median of 42 per cent for 'BBB' rated peers.
With decline in number of fresh COVID-19 cases and easing of restrictions, the country's gross domestic product (GDP) will grow at 8.5 per cent in FY2021-22, according to credit rating agency Icra Ratings. It expects the gross value added (GVA) at basic prices (at constant 2011-12 prices) to grow at 7.3 per cent in FY2022. "The impact of the second wave of COVID-19 and the ensuing state-wise restrictions was seen across a variety of high frequency indicators in April-May 2021.
'We have essentially tried to set out an agenda for the next five years and it, in essence, represents the political commitment to that agenda.'
Research and development (R&D) spending by BSE 100 companies has grown steadily, rising from 0.89 per cent of revenue in FY20 to 1.32 per cent in FY24, averaging around 1 per cent over the period in-between, according to data compiled from Bloomberg and company annual reports. Also, these companies more than doubled their R&D spending in absolute terms over these five years: From Rs 25,041 crore to Rs 63,072 crore. While this reflects a prioritisation of innovation, corporate R&D investment remains relatively conservative.
>Bihar (18 days) has the most number of heatwave days in 2023, followed by Andhra Pradesh (15 days), Odisha (15 days), Jharkhand (13 days), West Bengal (8 days) and Tamil Nadu (6 days).
An average Indian couple spends around 2x on weddings versus education (pre-primary to graduation).
India's GDP is estimated to grow at 7.4 per cent in the financial year 2022-23 with rising prices triggered by the Russia-Ukraine conflict posing as the biggest challenge to the global economic recovery, Ficci's Economic Outlook Survey released on Sunday said. According to the survey, the Reserve Bank of India (RBI) is likely to start a rate hike cycle in the second half of 2022, while a repo rate hike of 50-75 bps is expected by the end of the current fiscal. The RBI is expected to continue supporting the ongoing economic recovery by keeping the repo rate unchanged in its April policy review, the survey said.
The US Fed interest rate decision, ongoing quarterly earnings, macroeconomic data and FII trading activity are the major triggers that will drive stock markets this week, analysts said. Investors would also track global market trends and the movement in global oil prices for further cues. "This week, the focus will shift to global cues, particularly the US markets," Santosh Meena, Head of Research, Swastika Investmart Ltd said.
India's economy contracted by 7.3 per cent in fiscal 2020-21. The pandemic, it said, will leave new economic scars and deepen pre-pandemic constraints.
Growth rate in per capita income is projected to fall to the lowest in 21 years this financial year - except for the financial years 2019-20 (FY20) and 2020-21 (FY21) - according to the first advance estimates. During the last 21 years, the two periods - FY20 and FY21 - saw growth rates in per capita income lower than 7.9 per cent, seen during FY24. This was despite the real gross domestic product (GDP) being projected to grow by 7.3 per cent in the current financial year by the first advance estimates.
The Budget should use the extra RBI surplus to better effect, suggests A K Bhattacharya.
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