Winning Bizness Economic Desk
On the back of a healthy GDP growth in the second-quarter of this fiscal (Q2 FY 24), a top Indian government official has said that the momentum is expected to continue in the third-quarter (Q3 FY 24) as well.
There is also a very strong possibility of an upside to India’s GDP growth for this fiscal forecast at 6.5 per cent, India’s Chief Economic Advisor (CEA) Mr V Anantha Nageswaran, said.
There is presently a buoyancy in the Indian economy following the country’s GDP growth in Q2 this fiscal coming in at 7.6 per cent, which is well above the Reserve Bank of India (RBI)’s estimate of 6.5 per cent.
In Q1 this fiscal, the country’s GDP growth number came in at a heartening 7.8 per cent.
Mr Nageswaran highlighted the point that there was a high tax buoyancy and that this showed India may be understating its economic growth.
“When you have a tax buoyancy which is as high as 1.9 or close to 2, which is historically unprecedented, then it is quite possible that we are not measuring the underlying momentum of the economy. We will keep the GDP growth estimate for the full fiscal at 6.5 per cent but we are more comfortable (with the projection) than before,” Mr Nageswaran said.
The impact of the second-quarter GDP growth numbers is, however, yet to be worked out for the entire fiscal.
Mr Nageswaran exuded confidence that “the momentum of economic growth will continue in Q3 as well.”
India’s Nov GST Collection at Rs 1.68-trillion
This festival season has come as a boon for the Indian economy as festival sales propelled domestic consumption and lifted GST collections.
In November, the GST revenue collection (for sales in October) stood at a robust Rs 1.68-trillion as festival demand kicked-in to lift sales. In the previous month (October), the GST revenue mop-up stood at Rs 1.72-trillion. The highest-ever collection, a record Rs 1.87-trillion, was clocked in April this year.
A point to be highlighted here is that GST collections in six out of eight months up to November have come in above Rs 1.6-trillion.
The monthly average GST receipts is now at Rs 1.66-trillion, which is marginally higher than the policy-makers’ initial estimate of Rs 1.65-trillion.
Another important point here is that cumulative growth in the April-to-November period works out to 11.87 per cent which is closer to the nominal 10.5 per cent economic growth rate projected for this year.
India’s finance ministry said that revenue from domestic transactions and import of services moved northward by 20 per cent in November from the year-ago period. Post-settlement of taxes for inter-state sales, the Centre collected Rs 68, 297-crore while the states collected Rs 69,783-crore.
Combined with a healthy festive demand, the government’s emphasis on compliance, focussed recovery measures by the authorities and the revamp of the tax regime for the on-line gaming sector are also significant contributors to healthy GST revenue receipts.
India Pharma Ind to Reach USD 130-bn by 2030
The Indian pharmaceuticals industry is rapidly growing and it is expected to reach the USD 130-billion mark by 2030. This was stated by Dr Veeramani, S V, Chairman of the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
“The Indian pharmaceutical industry is on a compelling growth trajectory, evidenced by an eight per cent year-to-date increase in exports and a remarkable 29 per cent surge in October alone.
This growth is propelled by expanding market opportunities, heightened demand in the USA and critical shortages of medicines in the US and Europe,” Dr Veeramani said.
Despite challenges in CIS countries, the global reception of Indian pharmaceuticals remains positive, he said. An important point to be highlighted here is that the domestic market has exhibited a heartening 10 per cent-plus growth.
“Driven by this momentum, I am confident in reaching the USD 130-billion mark by 2030, advocating for a consistent 10 per cent growth in domestic and export markets,” Dr Veeramani added.
Phenomenal Sales of Made-in-India Products This Festival Season; Massive Loss for China
This festival season has turned out to be a memorable one for Indian retailers, traders including small traders, rural artisans, women entrepreneurs and small business people.
Indian retailers pan-India have clocked a massive and record trade of Rs 3.75-lakh-crore during this Diwali season with “almost only India products sold this Diwali” according to the Confederation of All India Traders (CAIT).
The Indian people’s very strong preference for Indian products or `Made in India’ products has benefited the country’s economy immensely while simultaneously adversely affecting China. This has severely affected sales of Chinese goods and caused it a loss worth more than Rs 1-lakh-crore, CAIT said.
The organisation’s National President and Secretary-General, B C Bhartia and Praveen Khandelwal, respectively, through a statement said that “in previous years, Chinese products were occupying nearly 70 per cent market of Diwali festivals. However, this year the appeal of Prime Minister Narendra Modi to make this Diwali vocal for local has gone down well and widely accepted and implemented by both traders and consumers.”
On the festival trade of Rs 3.75-lakh-crore, they said that this comprised about 13 per cent food and grocery spending, 9 per cent in jewellery and 12 per cent in textiles and garments spending.
Amongst others, four per cent spending was witnessed in dry fruits, sweets and namkeen, three per cent in home décor, 6 per cent in cosmetics and eight per cent in electronics and mobiles, etc.
The wedding season from Dev Uthan Ekadeshi (November 23-to-December 15) is expected to generate business worth Rs 4.5-lakh-crore with around 35-lakh weddings likely to be solemnised during this period, CAIT said.
Significantly, the Delhi region may alone host 3.5-lakh weddings, generating about Rs 1-lakh-crore of business, the organisation said.
As per CAIT, segments such as jewellery, sarees, readymade garments, furniture, footwear, ethnic wear, food-grains, decoration items, electric and electronics equipment and banquets/hotels are likely to benefit the maximum from the wedding season.
India’s Forex Reserves Rise to USD 598-bn
India’s foreign exchange reserves increased USD 2.538-billion to USD 597.935-billion for the week ended November 24, according to the Reserve Bank of India (RBI).
In the previous reporting week, the overall reserves had climbed up USD 5.077-billion to USD 595.397-billion.
The RBI, India’s apex bank, said that for the week ended November 24, the foreign currency assets, increased USD 2.14-billion to USD 528.531-billion. Foreign currency assets are a major component of the reserves.
If one were to express in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units such as the Euro, Pound and Yen held in forex reserves.
Gold reserves reached USD 46.338-billion, up USD 296-million even as the Special Drawing Rights (SDRs) moved northward USD 87-million to USD 18.218-billion.
The country’s reserve position with the International Monetary Fund (IMF) increased USD 14-million to USD 4.848-billion in the reporting week.
India To Become the Third-Largest Economy by 2030: S&P Global
On the eve of the New Year, globally-renowned agency S&P Global has come out with good news for India.
A report by S&P Global said that India will become the third largest economy by 2030 and that its GDP is likely to expand from 6.4 per cent in 2023 to seven per cent in 2026.
India is currently the fifth largest economy in the world. Ahead of it are four countries—the US, China, Germany and Japan.
"We see India reaching 7 per cent in the 2026-27 fiscal...India is set to become the third-largest economy by 2030, and we expect it will be the fastest-growing major economy in the next three-years," S&P said.
According to the Global Credit Outlook 2024 by S&P, India is projected to be the fastest-growing emerging market globally.
The report stated that India's growth is projected to be 6.4 per cent in FY 24, a slide from the 7.2 per cent of the preceding financial year.
S&P Global further said that it anticipates that the growth rate will persist at 6.4 per cent in 2024-25 before experiencing an increase to 6.9 per cent in the following year and reaching seven per cent in 2026-27.
"A strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one," it said.
There is also a need, S&P said, to enhance the skills of workers and increase women’s participation in the work-force. "Success in these two areas will enable India to realise its demographic dividend," it said.
S&P has highlighted the fact that India's thriving domestic digital market has the potential to fuel the growth of the high-potential start-up eco-system, especially in financial and consumer technology, going forward.