Winning Bizness Economic Desk
The Indian government has now allowed Foreign Direct Investment (FDI) of up to 100 per cent in the space sector.
The Union Cabinet has approved an amendment in the country’s FDI policy allowing satellite-related activities under the space sector to get FDI between 49 per cent-to-100 per cent.
With this, satellite manufacturing and operation, satellite data products and ground segment and user segment can get FDI up to 74 per cent under the automatic route. Beyond this, the government route will be applicable.
The sub-sector comprising launch vehicles and associated systems or sub-systems, the creation of spaceports for launching and receiving spacecraft can get FDI through automatic route up to 49 per cent.
However, beyond this, these activities are under the government route.
Here, it must be highlighted that a 100 per cent FDI under the automatic route has now been permitted to manufacture components and systems/sub-systems for satellites, ground segment and user segment.
To date, FDI is permitted to establish and operate satellites only through the government’s approval route.
“This increased private sector participation would help to generate employment, enable modern technology absorption and make the sector self-reliant. It is expected to integrate Indian companies into global value-chains,” a government statement said.
It further added that “with this, companies will be able to set up their manufacturing facilities within the country duly encouraging Make in India and Atmanirbhar Bharat initiatives of the government.
RBI Bulletin Pegs Country’s GDP Growth in Q4 FY 24 at 7 Per cent
The Reserve Bank of India (RBI)’s bulletin released just a few days ago has pegged the country’s GDP growth rate at seven per cent for the fourth-quarter (Q4) of this financial year ending on March 31, 2024 (FY 24).
The bulletin also stated that it expects a fresh round of capital expenditure by the corporate sector to propel the next leg of growth in the country’s economy.
“The Indian economy continues to sustain the momentum achieved in the first-half of 2023-24 going by the high frequency indicators,” the bulletin pointed out.
High frequency indicators presently point towards sustained strength in demand conditions in the economy.
Consumer confidence strengthened further in January 2024, driven especially by optimism about the general economic situation and employment conditions, as per the Reserve Bank of India’s latest survey of households.
“Various enterprise surveys also point towards strong business optimism,” the Reserve Bank’s bulletin said.
Automobile sales had clocked a 23.3 per cent year-on-year (YoY) growth in January with two-wheeler sales registering a double-digit growth. E-way bills expanded by 13.2 per cent in December of last year (2023).
Toll collections increased by 15.5 per cent YoY in January of this year, although they moderated sequentially from a record in the previous month.
Retail tractor sales registered a 21.2 per cent growth YoY in January 2024, a seven-month high. Here it must be highlighted that vehicle registrations also clocked a strong YoY growth.
On the agriculture front, rabi acreage during 2023-24 stood at 709.3-lakh-hectares, slightly higher than the sown area last year and 5.2 per cent more than the normal acreage.
Here, it must be pointed out that area under all major crops, except rice and pulses remained higher on a YoY basis. The area sown under wheat which accounts for 47 per cent of rabi full season normal area, increased by a marginal 0.7 per cent YoY, the bulletin stated.
Importantly, the RBI bulletin stated that it was upbeat that retail inflation would decline from its November-December 2023 increases, while core inflation was at its lowest since October 2019.
Edibon Of Spain to Invest Rs 540-cr in TN
The Spain-based company, Edibon, has inked a Memorandum of Understanding (MoU) with the Tamil Nadu state government to invest Rs 540-crore in the state.
Edibon manufactures technical teaching equipment.
The MoU was signed in the presence of the state’s chief minister Mr M K Stalin in Spain on February 5 of this year. Mr Stalin was on a visit to the European country earlier this month.
Mr Stalin said that he was very happy to seal the deal with Edibon. The company works in the areas of design, manufacturing and commercialisation of technical teaching equipment.
The state’s chief minister also said that he had held talks with more industrial majors such as Gestamp and Talgo as well as Mabtree, which is engaged in R&D in immunotherapies.
RBI, Nepal Ink Deal on UPI Integration
The Reserve Bank of India (RBI) and Nepal’s Rastra Bank has signed and exchanged terms of reference for the integration of fast payment systems of India and Nepal through the Unified Payments Interface (UPI) of India and the National Payments Interface (NPI) of Nepal.
India’s apex bank said in a press statement that the integration aims to facilitate cross-border remittances between India and its northern neighbour by enabling users of the two systems to make instant, low-cost fund transfers.
“The collaboration between India and Nepal in linking their fast payment systems through the UPI-NPI linkage will further deepen financial connectivity and reinforce the enduring historical cultural and economic ties between the two countries,” the Reserve Bank said in a press statement.
Based on the terms of reference exchanged between the Reserve Bank and NRB, necessary systems will be put in place for the interlinking of UPI and NPI, India’s central bank stated.
“The formal launch of the linkage, that is the commencement of operations, will be done at a later date,” the Reserve Bank said.
Here, it must be pointed out that earlier this month, the UPI was launched in Sri Lanka and Mauritius.
Uttar Pradesh Emerges as Top State in Total Vehicles Sales in Oct-Dec 2023
The northern state of Uttar Pradesh (UP) has clocked the highest number of vehicle sales in the October-to-December period of last year (2023). Behind Uttar Pradesh come the states of Maharashtra, Gujarat and Tamil Nadu (TN).
As per data from the Society of Indian Automobile Manufacturers (SIAM), Uttar Pradesh registered a total sale of 8,22,472 units across passenger and commercial vehicles and two-and-three-wheeler vehicles.
The western state of Maharashtra came in second with 6,88,192 units across the four categories followed by Gujarat with 4,21,026 units and Tamil Nadu 4,19,189 units in the same quarter.
In the case of three-wheelers as well, Uttar Pradesh registered the highest number of units sold at 23,859 units followed by Maharashtra (20,495 units), Gujarat (19,743 units) and Bihar (14,955 units).
A point to be highlighted here is that in the two-wheeler category as well, Uttar Pradesh topped the list with a total of 6,73,962 units sold. Maharashtra followed in second spot with a sale of 5,15,612 units.
The third and fourth spots were occupied by the central Indian state of Madhya Pradesh (3,35,478 units) and Tamil Nadu (3,24,918 units).
In the commercial vehicles category, however, Maharashtra came up tops with a sale of 31,055 units followed by Uttar Pradesh in the second spot (23,083 units), Gujarat at third (20,391 units) with Karnataka coming in the fourth spot with a sale of 16,966 units.
India’s GDP Growth Likely to Moderate to 6.5 Per Cent in FY 25
Leading credit ratings agency, India Ratings and Research, has said that it expects India’s GDP growth rate to moderate to 6.5 per cent in the next fiscal (FY 25).
The agency’s forecast is below the Reserve Bank of India (RBI)’s estimate of seven per cent GDP growth rate in FY 25.
India Ratings in its report said that despite the base effect, the sequential GDP growth indicates that the economic recovery is on track due to the sustained government capital expenditure, healthy corporate performance, deleveraged corporate sector balance-sheet, continuous softness in global commodity prices and the prospect of a new private corporate capex cycle.
The agency has upped its FY 24 forecast to 6.9 per cent from the earlier projected 6.7 per cent. Here, it must be pointed out that India Ratings has flagged trade distortions and geo-political fragmentation as risks to exports, noting that skewed consumption demand by upper-income households could also have an impact.
