Winning Bizness Economic Desk

The country’s Goods and Services Tax (GST) collection for May of this year stood at Rs 1.73-lakh-crore. This is an increase of ten per cent on a Year-on-Year (YoY) basis.

This growth was propelled by a healthy northward movement in domestic transactions of 15.3 per cent and a slide in imports of 4.3 per cent.

Here, it must be pointed out that the April GST revenue collection was at a record high of Rs 2.1-lakh-crore.

After accounting for refunds, the net GST revenue for May stood at Rs 1.44-lakh-crore, up by nearly seven per cent as compared to the same period last year, the Union Finance Ministry said.

Gross GST collections in FY 25 till May of this year is at Rs 3.83-lakh-crore. This is an 11.3 per cent YoY growth due to a significant increase in domestic transactions (up 142 per cent) and a marginal rise in imports (up 1.4 per cent).

Out of the May total collection, the government garnered Rs 32,409-crore via central GST (CGST), Rs 40,265-crore through State GST (SGST) while the Integrated GST (IGST) stood at Rs 87,781-crore. This included Rs 39,879-crore collected on imported goods.

RBI Maintains Status Quo on Repo Rate

India’s central bank, the Reserve Bank of India (RBI) has maintained a status quo on its repo rate.

Its Monetary Policy Committee (MPC) comprising six members has kept the policy repo rate unchanged at 6.5 per cent with a majority of 4:2.

The repo rate is the interest rate at which the Reserve Bank of India loans money to commercial banks.

The MPC also continued with its stance of withdrawal of accommodation while upwardly revising its economic growth forecast for this fiscal to 7.2 per cent from its earlier estimate of seven per cent.

“Inflation continues to moderate mainly driven by the core competent…Food inflation, however, remains elevated,” the Reserve Bank of India’s governor Mr Shaktikanta Das said.

“We are on the right track, but there is still work to be done,” he added.

With growth holding firm, monetary policy has greater elbow room to pursue price stability to ensure that inflation aligned with the target on a durable basis, the Reserve Bank governor said.

After upping the repo rate by 250 basis points (bps) or 2.50 per cent between May 2022 and February 2023, the country’s apex bank has kept the rate unchanged along with the withdrawal of an accommodative stance.

One basis point equals 1/100th of one per cent or 0.01 per cent. The word basis originates from the base move between two percentages or the gap between interest rates.

In the field of finance, a basis point is a standard unit of measurement for interest rates and other percentages.

The Reserve Bank has retained its CPI inflation projection for this fiscal (FY 25) at 4.5 per cent for the first-quarter (Q1) and at 3.8 per cent for the second-quarter (Q2).

For Q3 or the third-quarter, the RBI has projected CPI inflation at 4.6 per cent while for the final quarter of this fiscal or Q4, the projection is 4.5 per cent.

Adani Group Company Bags O&M Contract for Five Years in Kolkata

Adani Ports and Special Economic Zone (APSEZ) has said that it has received the Letter of Intent (LoI) for the operation and maintenance of the container facility at the Syama Prasad Mookerji Port in Kolkata.

APSEZ is a Gautam Adani group company. It has won a five-year operations and maintenance (O&M) contract through a competitive bidding process.

The company in its stock-exchange filing said that the successful bidder has to deploy cargo handling equipment within seven-months from the Letter of Acceptance (LoA) date.

Here, it must be pointed out that the Kolkata port is the nominated port for the Indo-Bangladesh Protocol on Inland Water Transit and Trade route.

Netaji Subhas Dock has regular liner service calls from the hub ports of Singapore, Port Kelang and Colombo. It is said to be the largest container terminal on the eastern coast of India.

It handled around 0.63-million TEUs in FY 24, serving a vast hinterland encompassing West Bengal, Bihar, Uttar Pradesh, Jharkhand, Assam, the north-eastern hill states and the landlocked neighbouring countries of Nepal and Bhutan.

“We will bring our experience of over two decades of efficiently managing various container terminals within India and outside benefiting customers and the people of the state,” APSEZ’s Whole-Time Director and CEO, Ashwini Gupta said.

India’s Forex Reserves Climb to All-Time High

India’s forex reserves climbed USD 4.837-billion to hit a new all-time high of USD 651.5-billion for the week ended May 31, the Reserve Bank of India (RBI) said.

Here, it must be pointed out that the overall reserves had slid USD 2.027-billion to USD 646.673-billion in the previous reporting week.

“Touching a new milestone, India’s forex reserves reached a historical high of USD 651.5-billion as on May 31,” the country’s apex bank’s governor Mr Shaktikanta Das said in his statement while announcing the bi-monthly policy review.

For the week ended May 31, foreign currency assets (FCAs), a major component of the reserves, moved northward by USD 5.065.51-billion to USD 572.564-billion, according to the Reserve Bank’s data.

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

Gold reserves decreased USD 212-million to USD 56.501-billion during the week, the country’s apex bank said.

The Special Drawing Rights (SDRs) were down USD 17-million to USD 18.118-billion, the Reserve Bank said.

India’s reserve position with the International Monetary Fund (IMF) was up USD 1-million to USD 4.326-billion in the reporting week, the Reserve Bank data showed.

RBI Raises FY 25 Real GDP Growth Forecast

India’s apex bank, the Reserve Bank of India (RBI), has upped its real GDP growth forecast for the current fiscal (FY 25) to 7.2 per cent from its earlier forecast of seven per cent.

In the last financial year (FY 24), the country’s GDP expanded 8.2 per cent.

On the repo rate, the benchmark interest rate, the Reserve Bank kept it unchanged at 6.5 per cent.

The point to note here is that the repo rate was kept unchanged by a 4:2 majority. This was the eighth time that the country’s apex bank left the repo rate unchanged.

The point to be highlighted here is that the last time the repo rate was hiked was in February 2023.

Another important point that needs highlighting here is that for the whole of last fiscal (FY 24), the repo rate was kept unchanged at 6.5 per cent. The Reserve Bank also decided to remain focussed on withdrawal of accommodation.

The Monetary Policy Committee (MPC) also upped its GDP growth projections for each of the four quarters of this financial year.

For Q1 FY 25, the Reserve Bank expects a growth of 7.3 per cent from 7.2 per cent while for the second-quarter (Q2 FY 25), the bank raised its GDP projection to 7.2 per cent from its earlier projection of 6.8 per cent.

For the third-quarter (Q3 FY 25), it has upped its growth projection to 7.3 per cent from seven per cent while the last quarter of this fiscal (Q4 FY 25), the growth forecast has been upped to 7.2 per cent from 6.9 per cent.

An important point to be noted here is that the Monetary Policy Committee has also retained its FY 25 inflation projection at 4.5 per cent.

“The MPC remains vigilant to outside risks to inflation, particularly food inflation as it could delay the path of disinflation,” the RBI governor Mr Shaktikanta Das said.