Indian Economy: News and Discussion

[NutCracker]

It used to be ~70 in 2019, and it's 83 now. That's almost a 20% depreciation in 5 years.

It's major jump was until 2020 April. It hit 76.4, Since then in 4 years it rose only 9.1%. Let's see how stable it's stays in first year of third term .

 

[Crazywithmath]

Provisional Estimates of Annual GDP for 2023-24 And Quarterly Estimates of GDP for Q4 of 2023-24

Link= Press Information Bureau (pib.gov.in)


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Key Highlights:

• Real GDP has been estimated to grow by 8.2% in FY 2023-24 as compared to the growth rate of 7.0% in FY 2022-23. Nominal GDP has witnessed a growth rate of 9.6% in FY 2023-24 over the growth rate of 14.2% in FY 2022-23.
• Real GVA has grown by 7.2% in 2023-24 over 6.7% in 2022-23. This GVA growth has been mainly due to significant growth of 9.9% in Manufacturing sector in 2023-24 over -2.2% in 2022-23 and growth of 7.1% in 2023-24 over 1.9% in 2022-23 for Mining & Quarrying sector.
• Real GVA and Real GDP have been estimated to grow by 6.3% and 7.8% respectively in Q4 of FY 2023-24. Growth rates in Nominal GVA and Nominal GDP for Q4 of FY 2023-24 have been estimated at 8.0% and 9.9% respectively.

 

[tsunami]

USDINR has been pretty stable; the era of 3-4% annual depreciation is gone.

Also, If an NDA govt comes back in 2029 chances are that USDINR won't ever go past 90.




That's all in the past. Check past 1.5+ years; our deficit numbers are good too. Even before that, both the UPA and the NDA exhibited similar levels of depreciation in the INR; despite significant headwind (covid etc) during the latter's tenure.

From 2025 INR will start appreciating against USD. By 2029 Situation will be much much different. By the end of 2025 everything will be clear.

 

[tsunami]

It's major jump was until 2020 April. It hit 76.4, Since then in 4 years it rose only 9.1%. Let's see how stable it's stays in first year of third term .

Most probably we will see jump this year, it may cross 90.

 

[Crazywithmath]

Most probably we will see jump this year, it may cross 90.

Don't see any meaningful depreciation of INR anytime soon.

=======================

How true is it?

 

[nongaddarliberal]

Most probably we will see jump this year, it may cross 90.

Why?

 

[nongaddarliberal]

Imo a steady 2% appreciation of the rupee per year will be ideal, when the outside world is already in an inflationary trap. We're still a very import dependant country and will continue to import a lot in the form of oil, factory machinery, defence systems, airplanes, and most components for electronics. Being able to import these at stable prices will allow us to expand our exports more easily by increasing productivity rather than depend on currency depreciation. It'll also greatly control inflation at home.

 

[new salem]

Kerala gets fund approval for green hydrogen valley project - ET EnergyWorld

The state plans to develop two green hydrogen valleys in Kochi and Thiruvananthapuram and the proposal was submitted last year to the DST

energy.economictimes.indiatimes.com

 

[Crazywithmath]

Imo a steady 2% appreciation of the rupee per year will be ideal, when the outside world is already in an inflationary trap. We're still a very import dependant country and will continue to import a lot in the form of oil, factory machinery, defence systems, airplanes, and most components for electronics. Being able to import these at stable prices will allow us to expand our exports more easily by increasing productivity rather than depend on currency depreciation. It'll also greatly control inflation at home.

Don't think RBI will let the INR appreciate significantly; they would fuel the reserves instead.

 

[astrologerdebrajacharya]

Sanjay Verma, Executive Managing Director- South Asia, Cushman & Wakefield believes that given the current financial and economic scenario globally, its difficult to assess how much further downside is there from a global perspective and how much time will the recovery take.
He says that a lot depends on the commitment demonstrated by the new government, post elections in April-May 2009, towards reforms, liberalization and infrastructure spending, in an interview to Praveen K Singh.

Excerpts:


•How do you assess the current market scenario when the global meltdown erodes the market capitalisation of Indian real estate companies?

The severe beating that real estate stocks have taken in the public equity markets could be attributed to three main reasons. Firstly, the global financial crisis led by the sub-prime issue caused major international investors to cut exposure to the real estate sector globally. Secondly, due to the severe economic downturn, demand has slowed down and hence profitability and in turn, stock values have taken a hit. Last but not the least, many of these listed real estate companies are overly leveraged and their ability to service that debt is under question. This has further eroded their stock value as it creates a question on the survival of these companies. Given the current sentiment, the prospects are expected to continue to be bleak for some time to come as there has been a structural negative change in the perception.


What sense you are getting from international investors about the current scenario in India?

International investors have made strong commitments to India in the last three years. However, in wake of the current global financial melt down with real estate values taking significant beating in western world, general sentiment in the international investment community is that they should focus on their core markets such as US and Europe where they are getting deals that offer much higher returns than ever before. Hence, on a risk adjusted basis, their return expectations from emerging markets like India have gone up (say from 20-25 per cent to 30-35 per cent.)


•Is it the right time to scale up investment activities in India, as valuations are expected to be down to more realistic levels?

The market is currently in a flux with clear slowdown in demand. While the values have dipped to some extent, investors will have to be very selective in choosing their investment targets. Investors with a long term focus will tend to benefit more that those with shorter horizons as the fundamentals are strong but short term uncertainties create challenges for investors.


•When do you think situation will improve?

Given the current financial and economic scenario globally, its difficult to assess how much further downside is there from a global perspective and how much time will the recovery take. Yet, on basis on economic growth potential, India is expected to fare much better that most other economies. There are number of factors which make India a unique and attractive case for investment.

Some of those include the demographic advantage (young middle class), very low mortgage to GDP ratio, significant demand for infrastructure and room for policy level intervention to stimulate demand. A lot depends on the commitment demonstrated by the new government, post elections in April-May 2009, towards reforms, liberalization and infrastructure spending. If all goes well, we expect 2010 to see at least the beginning of the recovery process.

‘We expect 2010 to see at least the beginning of the recovery process’

Sanjay Verma, Executive Managing Director- South Asia, Cushman & Wakefield believes that given the current financial and economic scenario globally, its difficult to assess how much further downside is there from a global perspective and how much time will the recovery take.
He says that a lot depends on the commitment demonstrated by the new government, post elections in April-May 2009, towards reforms, liberalization and infrastructure spending, in an interview to Praveen K Singh.

Excerpts:


•How do you assess the current market scenario when the global meltdown erodes the market capitalisation of Indian real estate companies?

The severe beating that real estate stocks have taken in the public equity markets could be attributed to three main reasons. Firstly, the global financial crisis led by the sub-prime issue caused major international investors to cut exposure to the real estate sector globally. Secondly, due to the severe economic downturn, demand has slowed down and hence profitability and in turn, stock values have taken a hit. Last but not the least, many of these listed real estate companies are overly leveraged and their ability to service that debt is under question. This has further eroded their stock value as it creates a question on the survival of these companies. Given the current sentiment, the prospects are expected to continue to be bleak for some time to come as there has been a structural negative change in the perception.

 

[Tejbrahmastra]

Good thread to read on India's economy

 

[NutCracker]

 

[Haldilal]

Ya'll Nibbiars The Mumbai Offshore Basin has Enough Hydro Carbon to increase it's Current Production Capacity by Three Times, what needed is a political will. Mith new rigs and blocks as near as 15 K.M from the Mumbai Coast will result in more Oil Discovery and much Highsr Production even potential upto three times than the current rate.

 

[Tejbrahmastra]

https://www.goodreturns.in/classroom/gr-exclusive-

fpi-selloff-why-foreign-investors-are-divesting-from-stock-market-despite-record-highs-1349793.html

 

[Azaad]

Alliance of India's 26 top drugmakers opposes generic drug substitution at Janaushadhi Kendras

Leading drugmakers express apprehension over CDSCO’s proposal to permit generic alternatives for key medications, emphasizing the risk of compromised drug quality.

theprint.in

 

[thebakofbakchod]

the biggest problem of India is intellectuals defending poverty at every venue they can. Most street vendors openly dump their rubbish beside them, and municipalities do nothing to clean or chase them away and thus are one of the biggest reasons behind the filth and choas of most cities. But the amount of vendors is a symptom of the complete lack of proper jobs in rural India/poorer states that makes it more lucrative to migrate to cities and live like this. My recent trip to Philippines made me realise that the density of street vendors is significantly less than India and Philippines is one of the posterchilds of poverty. Sadly I do not see indian dumbocracy fixing this in the next 20 years.

 

[Haldilal]

Ya'll Nibbiars The Policies of 80's led to the 90's.

 

[ezsasa]

GST collection for May at Rs 1.73 lakh crore, up 10% YoY

https://www.moneycontrol.com/news/economy-2/gst-collection-for-may-at-rs-1-73-lakh-lakh-crore-up-10-yoy-12738362.html

 

[another_armchair]

UPI see's marginal growth in April. Should see marginal growth in May too largely because of holidays.

Month	No. of Banks live on UPI	Volume (in Mn)	Value (in Cr.)
Apr’24	581	13,303.99	19,64,464.52
Mar'24	572	13,440.00	19,78,353.23
Feb'24	560	12,102.67	18,27,869.35
Jan'24	550	12,203.02	18,41,083.97
Dec'23	522	12,020.23	18,22,949.42

 

[ezsasa]

under consideration, not a policy..
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In a significant move, the Reserve Bank of India (RBI) has proposed to allow overseas rupee accounts for Persons of Indian Origin (PIOs) and enable Indian banks to lend money to them via these accounts. This decision marks a pivotal step towards Rupee internationalization, which refers to increasing the use of the Indian rupee in international transactions and as a reserve currency. While internationalization of an emerging market currency comes with both benefits and risks*, the potential for Indian banks to tap into the vast PIO community as an extended customer base could be a game-changer for the Indian economy. It is worth noting that there are over 30 million NRIs and PIOs worldwide, representing a significant market for Indian banks.

Overseas rupee accounts can encourage PIOs to open deposits and take advantage of the interest rate arbitrage opportunity. Currently, interest rates in India are significantly higher compared to developed economies. For instance, the average savings account interest rate in the United States is less than 0.5%, while in India, it ranges from 3% to 7%, with even higher rates for fixed deposits. This difference can attract PIOs to park their funds in Indian banks, promoting liquidity in the Indian banking sector.

The process involves PIOs depositing their local currency - e.g., US dollars - into these overseas rupee accounts offered by Indian banks (or banks that have operations in India). The bank would then exchange it for rupees through the RBI. This process not only benefits the bank but also helps increase the RBI's forex reserves, thereby strengthening the Indian rupee.

The funds received as deposits can be used by Indian banks to lend in India or overseas. Since rupee loans would be less attractive to PIOs due to higher interest rates, this allows banks to lend more within India, contributing to economic growth. Additionally, these accounts would simplify investments by PIOs in Indian assets like real estate, debt, and equities, attracting more foreign investment into the country.

To ensure that this move doesn't drain money from the Indian banking sector, the RBI can tweak the Loan-to-Deposit Ratio (LDR) norms for such foreign deposits and loans. The LDR measures the proportion of loans given out of the deposits received. By maintaining a healthy LDR range for overseas rupee accounts, the RBI can strike a balance between promoting foreign investments and maintaining adequate liquidity within India.

In conclusion, the RBI's proposal to allow overseas rupee accounts for PIOs is a welcome move that could potentially boost the Indian economy. By attracting foreign investments, increasing forex reserves, and promoting domestic lending, this initiative can contribute to India's growth story.