Winning Bizness Economic Desk

India’s economy is expected to expand at 7-to-7.2 per cent this fiscal (FY 25). This growth will be propelled by strong economic fundamentals and continuity in domestic policy reforms, Deloitte India said.

The August month update of Deloitte’s India Economic Outlook said several initiatives in the Union Budget 2024-25 toward improving agricultural productivity, creating jobs for youth, and in manufacturing and addressing the challenges of access to finance for Micro, Small and Medium Enterprises (MSMEs) would help improve supply-side demand, curb inflation and push-up consumer spending, especially in rural areas.

India will register a robust growth in the first six-months of the year, Deloitte India’s Economist Rumki Majumdar said.

“Key contributing factors include the continuity in domestic policy reforms, reduced uncertainties in the post-US election and more synchronous global growth within a low inflation regime,” Majumdar said.

The Economic Outlook report stated that effectively addressing the urban-rural consumer spending gaps, inflation and employment concerns, can significantly enhance the affordability of aspirational rural consumers.

“The much desirable policy pivot was evident in the Union Budget presented last month. Reducing the urban and rural spending gap in the coming years will ensure sustained consumer demand from a larger consumer base,” it said.

Forex Reserves Hit Record High of USD 675-bn

The country’s foreign exchange reserves climbed up steeply by USD 7.533-billion to hit a fresh record high of USD 674.919-billion for the week ended August 2, 2024, data from the Reserve Bank of India (RBI) showed.

For the previous week ended July 26, 2024, the overall foreign exchange kitty had dipped by USD 3.471-billion to USD 667.386-billion.

The previous record high was USD 670.857-billion, attained on July 18, 2024.

So far this year (2024), the reserves have increased by about USD 45.50-billion on a cumulative basis.

The buffer of foreign exchange reserves helps to insulate domestic economic activities from global spill-overs.

For the week ended August 2, the Foreign Currency Assets (FCAs), a major component of the reserves, moved northward by USD 5.162-billion to USD 592.039-billion.

Expressed in dollar terms, the Foreign Currency Assets include the effect of appreciation or depreciation of non-US units like the Euro, Pound and Yen held in the forex reserves.

Gold reserves also climbed up by USD 2.404-billion to USD 60.099-billion during the week. The Special Drawing Rights (SDRs) were down by USD 41-million to USD 18.161-billion.

In the reporting week, the country’s reserve position with the International Monetary Fund (IMF) rose by USD 8-milllion to USD 4.62-billion.

Here, an important point to note is that the country’s foreign exchange reserves are sufficient to cover over 11-months of projected imports.

In 2023, the Reserve Bank added about USD 58-billion to its forex kitty. In the previous year (2022) the country’s forex kitty moved sharpy southward by USD 71-billion cumulatively.

Foreign exchange reserves are assets held by a nation’s central bank or monetary authority.

It is generally held in reserve currencies, usually the US Dollar and to a lesser degree, the Euro, Pound Sterling and the Japanese Yen.

Coffee Board Says Output Likely to be Adversely Affected This Year

Coffee Board Says Output Likely to be Adversely Affected This Year

The Coffee Board of India has said that coffee production for 2024-25 may be significantly lower as there has been a tremendous loss of plants and berries because of the high temperature, heavy rainfall and landslides in areas in the country where coffee is grown on a large scale.

The southern state of Karnataka accounts for 70 per cent of the country’s total coffee production while another southern state Kerala is the second largest producer with a 23 per cent contribution.

A point to note here is that in Wayanad which was struck by a natural disaster recently, in excess of 200-acres of land under coffee cultivation was washed away in the recent landslide, heavily impacting this year’s output.

The Coffee Board is reported to have written to coffee-growing districts asking them to constitute inter-disciplinary teams to conduct a comprehensive survey of plantations to assess losses within a month.

The Karnataka Planters Association Chairman Mr K G Rajeev said that the planters’ association has estimated a minimum field loss of 15 per cent-to-20 per cent in the key coffee producing areas comprising Chikmagalaru, Hassan and Coorg districts.

“We had a prolonged drought of 120 days. In April-May, we saw scorching of blossom clusters, fruit burn when they were in pin-head size and temperature soaring high.

“Then, in July, we received 35 inches of rain, of the 62 inches we received so far since January,” Mr Rajeev said.

All these resulted in berry dropping, stalk rot, wet foot, huge plant and plantations losses due to landslides in Sakleshpur and other areas, Mr Rajeev said.

FDI in Manufacturing Up 69 pc to USD 165-bn Between 2014-24

The Foreign Direct Investment (FDI) inflows in the manufacturing sector during the 2014-24 period moved steeply northward by 69 per cent to USD 165.1-billion, India’s Parliament was informed in a written reply by the Minister of State for Commerce and Industry, Mr Jitin Prasada.

Mr Prasada said that the country was rapidly emerging as a preferred country for foreign investment in the manufacturing sector.

“FDI equity inflow in the manufacturing sector in the last ten financial years (2014-to-2024) has increased by 69 per cent to USD 165.1-billion as compared to USD 97.7-billion in the previous ten financial years (2004-to-2014),” he said.

The minister also said that a total FDI inflow of USD 383.50-billion has been reported in the country during the past five financial years (2019-20-to-2023-24).

An important point the Minister said was that the initiatives taken by the government have led to a slide in dependency on imports in several sectors, including mobiles.

The import of mobile phones has move southward from Rs 48,609-crore in 2014-15 to Rs 7,674-crore in 2023-24.

On the other hand, the exports have climbed up from Rs 1,566-crore in 2014-15 to more than Rs 1,28,982-crore in 2023-24,” the minister said.

IT Companies with Highest-Paid CEOs in FY 24

Former Wipro CEO Mr Thierry Delaporte took home a massive USD 20-million (Rs 166-crore) compensation for the last fiscal (FY 24). He was, therefore, the highest paid CEO in the Indian IT services sector.

Mr Delaporte resigned from his post in April of this year.

Following him, are the chief executives of Coforge and Persistent Systems who are also in the top five slots. They earned more than their counterparts in Tata Consultancy Services (TCS) and Infosys in the last financial year, a leading financial publication reported.

Coforge’s CEO Mr Sudhir Singh’s annual remuneration in FY 24 stood at USD 12.5-million (Rs 105.12-crore), positioning him in the second spot after Mr Delaporte.

Following Mr Singh is HCL Tech’s CEO Mr C Vijayakumar, whose annual compensation for FY 24 was USD 10.06-million (Rs 84.17-crore). Earning Rs 77-crore or USD 9.1-million was Mr Sandeep Kalra of Persistent Systems.

Meanwhile, Infosys’ CEO Mr Salil Parekh earned USD 78-million (Rs 66-crore)–he was fifth on the list.

Following the above names, are two others—Mr Nitin Rakesh of Mphasis and Mr K Krithivasan, the CEO of the Tata group’s blue-chip company TCS.

The former earned USD 5.2-million (Rs 44.13-crore) while Mr Krithivasan who took charge of TCS in June of last year, took home a compensation of USD 3-million (Rs 25.2-crore).

Another leading CEO in the IT sector, Mr Debashis Chatterjee, the CEO of LTIMindTree was paid a total compensation of USD 2.3-million (Rs 19.34-crore) in FY 24.