Winning Bizness Economic Desk

The country’s foreign exchange reserves slipped by USD 3.471-billion to USD 667.386-billion for the week ended July 26, according to data released by the Reserve Bank of India (RBI).

In the previous reporting week, the kitty had jumped by USD 4.003-billion to an all-time high of USD 670.857-billion.

For the week ended July 26, the foreign currency assets (FCAs), a major component of the reserves decreased by USD 1.171-billion to USD 586.877-billion, the RBI data showed.

The Reserve Bank of India is India’s apex bank.

Expressed in dollar terms, foreign currency assets include the effect of appreciation or depreciation of non-US units such as the Euro, Pound and Yen held in the foreign exchange reserves.

Gold reserves moved southward by USD 2.297-billion to USD 57.695-billion during the week. The Special Drawing Rights (SDRs) were down by USD 5-million to USD 18.202-billion.

India’s reserve position with the International Monetary Fund (IMF) was up by USD 2-million to USD 4.612-billion in the reporting week.

GST July Collection Up 10.3 Per Cent

The Goods and Services Tax (GST) collection in July climbed up 10.3 per cent to over Rs 1.82-trillion, propelled mainly by domestic transactions in goods and services, according to data released by the union government.

The point to be highlighted here is that this is the third-highest monthly collection ever recorded since the launch of the GST regime in July 2017.

Total refunds in the same month stood at Rs 16,283-crore.

The net GST collection after adjusting refunds was over Rs 1.66-trillion, a growth of 14.4 per cent.

The gross GST revenue stood at Rs 1,82,075-crore which includes Central GST (CGST) of Rs 32,386-crore, State GST (SGST) of Rs 40,289-crore and Integrated GST (IGST) of Rs 96,447-crore.

The compensation cess was Rs 12,953-crore.

The point to note here is that revenues were driven by taxes from domestic activities which moved northward 8.9 per cent to Rs 1.34-trillion in July.

Revenues from imports rose 14.2 per cent to Rs 48,039-crore.

The gross GST revenue hit a record high of Rs 2.10-trillion in April 2024; the previous high was in April 2023 when it stood at Rs 1.87-trillion. So far, this fiscal (FY 25) in the April-to-July period, collections have expanded 10.2 per cent to about Rs 7.39-trillion.

Kharif Sowing More Than Last Year

Farmers in the country have sown kharif crops across 904.60-lakh hectares so far this year, as against 879.22-lakh hectares in the same period of last year, according to latest data from the Agriculture Ministry.

On a yearly basis, the sowing is about three per cent higher while commodity-wise, paddy, pulses, oilseeds, millets and sugarcane sowing have been higher Year-on-Year (YoY).

Sowing for cotton and jute/mesta has declined.

India’s agriculture minister Mr Shivraj Singh Chouhan recently said that the central government is committed to have a 100 per cent procurement for urad, arhar and masur in all the states.

Here, it must be pointed out that India is both a large consumer and grower of pulses and it meets a portion of its consumption needs through imports.

The primary consumption in the country is of chana, masur, urad, kabuli chana and tur pulses.

Despite several measures, including various incentives to farmers, India is still dependent on import of pulses for its domestic requirements. Here, it must be highlighted that pulses imports have almost doubled in 2023-24.

Traditionally, Indian agriculture (especially kharif area/output) has been heavily dependent on the normal progression of monsoon rainfall. The good news is that a normal monsoon has been predicted for this year.

India’s Seafood Exports Up by Over 30 pc in Last Five Years

Seafood exports from India have clocked a 30.81 per cent increase in the last five-years. In money terms, the exports have moved northward from Rs 46,662.85-crore in 2019-20 to Rs 61,043.68-crore in 2023-24.

This was stated by the Union Minister of State for Commerce and Industry, Mr Jitin Prasada.

The country’s maritime production in the last five-years (from 2019-20-to-2023-24) now stands at 809.52-lakh tonnes.

A point to be highlighted here is that there has been an upward trend in this segment as India managed to achieve a production of 175.45-lakh tonnes in 2022-23 from 141.64-lakh tonnes in 2019-20.

For 2023-24, the number is projected to be around 182.7-lakh tonnes, Mr Prasada said.

India has exported 74.68-lakh tonnes of marine products in the last five-years with the number in 2023-24 proving to be the highest during this period.

In 2023-24, India exported 18.19-lakh tonnes of marine products as compared to 13.29-lakh tonnes during 2019-20.

The Minister said that in his response that the Department of Fisheries is also implementing the Pradhan Mantri Matsya Sampada Yojana (PMMSY) at an investment of over Rs 20,050-crore for five-years from 2020-21 to 2024-25 to encourage exports from the fisheries sector.

India Ratings Ups GDP Growth Projection for FY 25 to 7.5 Per Cent

India Ratings and Research (Ind-Ra) has revised northward the country’s GDP growth projection for the current fiscal (FY 25) to 7.5 per cent from its earlier projection of 7.1 per cent.

The ratings agency forwarded the uptick in consumption demand driven by continued focus on government capital expenditure in the Union Budget and deleveraged balance-sheets of banks and corporates as the reasons for doing so.

The on-going growth momentum propelled by government capex, deleveraged balance-sheets of corporates and banks and incipient private corporate capex cycle has now found support from the union government budget, India Ratings and Research has said.

The budget is aimed at boosting agricultural and rural spending, improve credit delivery to MSMEs and incentivise employment creation in the economy.

Ind-Ra said that it believed that these measures would assist in broad-basing the consumption demand which, if not addressed, can constrain the on-going growth momentum.

Growth in private final consumption expenditure is likely to accelerate from four per cent in 2023-24 to 7.4 per cent in the current financial year, the highest in three-years.

Although food inflation continues to be a risk, the expectation of retail inflation in FY 25 averaging lower than the last fiscal (FY 24), will back real wage growth, the ratings agency observed.

Ind-Ra said that the average retail and wholesale inflation was likely to come in at 4.5 per cent and 3.2 per cent, respectively, in the current financial year.

On private capital expenditure, the ratings agency said that “private sector greenfield capex barring a few sectors has remained down and out now for several years. Some green-shots, though, are visible,” it said.

A revival in the private sector capex may lessen the capex spending of the union government, but that is still some distance away, it said.

Russia Dominates India’s Oil Imports in July

India’s imports of Russian oil in July registered a slight Month-on-Month (MoM) increase to its highest level in over a year, propelled by strong flows of Russian’s key crude grade Urals.

Additionally, industry experts said that there was an uptick of ESPO crude which also was responsible for the increased oil imports from Russia.

Indian refiners imported a total of 2.08-million barrels per day (bpd) of Russian crude oil in July, the highest since June last year, when Russian crude imports were at near-record high levels.

Here, a point that needs to be mentioned is that the country’s Russian oil imports in July were around a per cent higher sequentially and accounted for as much as 43 per cent of India’s total oil imports of 4.82-million barrels per day.

Russia’s share was almost as much as the cumulative market share of the next four large suppliers—Iraq, Saudi Araba, the United Arab Emirates (UAE) and the United States (US).

What requires highlighting is that July was the seventh straight month of sequential growth in India’s Russian oil imports. In June, import volumes from Saudi Araba had fallen to the lowest monthly level in over a decade.

India’s oil imports from Saudi Arabia—the country’s third biggest source market for crude—in July were at 0.66-million bpd, up from the previous month’s 0.42-million bpd, but still considerably lower than last year’s average of 0.72-million bpd.

Saudi Arabian oil accounted for 13.7 per cent of India’s oil imports in July.