1. IMF raises Indian Growth rate for FY 23 to 9%
Tags: Economics/Business
International Monetary Fund (IMF) has raised the growth prospect of the Indian economy in 2022-23 to 9 % from the earlier forecast of 8.5%.
The IMF “World Economic Outlook report” released on 25 January 2022 has cut the economic growth rate for the world with weak growth forecasted in the United States and China.
Main Points of the Report
- It expects the world economy to grow by 4.4% in 2022 and 3.8% in 2023. The world economy grew by 5.9% in 2021.
- The main reason for the drop in world growth is due to lower growth in the US and China.
- The main reason for the weak world economic outlook is the spread of the Omicron variant of coronavirus which has led to a curb on mobility by countries . This has led to the disruption in the world supply chain and rise in inflation in all the countries.
- It expects the world's second largest economy China to grow by 4.8% and the largest economy in the world , the US is expected to grow by 4% in 2022.
India a lone Bright spot
- Among major economies of the world India’s growth rate is expected to be one of the highest in the world.
- The Indian economy growth rate has been increased from the earlier 8.5% to 9% in 2022-23.
- India's GDP growth forecast for FY24 was also raised by 50 bps to 7.1 percent.
- According to the IMF an expected improvement in India’s credit growth will boost consumption and investment . Also the financial sector growth in India is better than expected, boosting its overall growth rate prospect.
2. Government release Vision Document on Electronic Manufacturing
Tags: Economics/Business
The Union Ministry of Electronics and Information Technology in association with the Indian Cellular and Electronic Association (ICEA) released a 5 year roadmap and Vision Document for the electronic sectors on 24 January 2022.
- The title of the document is “300 billion Sustainable Electronics Manufacturing and Exports by 2026”.
- It is the second volume of the two volume document released by the Ministry and the first was released in November 2021 titled “Increasing India's Electronics Exports and Share in GVCs (Global Value Chain)”.
Highlights of the Document:
- It has set a target to increase the production of electronics goods in India from current $75 billion to $300 billion by 2026.
- The export of electronic goods is expected to increase from projected US$15 billion in 2021-22 to US$120 billion by 2026.
- The key products which have been identified are mobile phones,IT hardware (laptops.tablets),industrial electronics,auto electronics, wearables and hearables,telecom equipment ,consumer electronics(TV and audio) ,LED lighting,strategic electronics . Focus is on mobile manufacturing which is expected to cross $100 billion from the current $30 billion by 2026.It is expected to contribute nearly 40 percent in the targeted electronic sector manufacturing growth.
- The Government earlier announced a $10 billion Production Linked Incentive (PLI) scheme to attract investment in Semiconductor and Display Ecosystem.
- The government has committed nearly US$17 billion over the next 6 years across four PLI Schemes - Semiconductor and Design, Smartphones, IT Hardware and Components.
Union Minister of Electronics and Technology: Ashwini Vaishnav
For details about Semiconductor policy and challenges see the Blog on Semiconductor .
3. City Union Bank launches contactless CUB Easy Pay debit card
Tags: Economics/Business
Kumbakonam based private bank City Union Bank has launched CUB Easy Pay debit card. It is a fitness watch which will have the feature of a debit card.
- It has been launched in association with smart-tech-enabled preventive healthcare platform GOQii and National Payment Corporation of India (NPCI).
- It is a contact less card which means that the customer has to just hold the wrist watch in front of the Point of Sale Terminal (PoS) for payment purposes just like cards and the payment will be done .
- For payment above Rs 5000 use of PIN is mandatory as per RBI guidelines.
- The contactless cards work on Near Field Communication (NFC) technology.
- This is the second such product launched by the bank after it launched RuPay on- the- go contactless wearable keychains for its debit customer in December 2021.
- Headquarters of City Union Bank: Kumbakonam, Tamil Nadu
4. World Bank $125 million loan to West Bengal
Tags: Economics/Business
The World Bank has approved a $125 million (approx Rs 1000 crore) loan to West Bengal to support the state’s effort to help the poor and vulnerable groups access social protection services.
- The loan will be used by the government to help vulnerable groups such as women, tribal and scheduled caste households and the elderly, as well as households in the state’s disaster-prone coastal regions.
5. $300 billion Service sector export target for 2022-23
Tags: Economics/Business
The Service Export Promotion Council (SEPC) under the ministry of Commerce and Industry has set a target of $300 billion for export of services from India in 2022-23 .
- The target for 2021-22 export was $250 billion.
- The total service sector export in the current financial year for the first nine month (April to December 2021) was $178 billion.
6. India emerges as largest exporter of cucumber, gherkins in the world
Tags: Economics/Business
India has exported cucumber and gherkins to the tune of over one lakh 23 thousand metric tonnes with a value of 114 million US dollar during April to October 2020-21.
- Ministry of Commerce and Industry in a statement said that India has crossed 200 million US dollar mark of export of agricultural processed product- pickling cucumber, which is globally referred as gherkins or cornichons, in the last financial year.
- In 2020-21, India had shipped over 2 lakh 23 thousand metric tonnes of cucumber and gherkins with a value of 223 million US dollar.
- Gherkins is currently exported to more than 20 countries including USA, France, Germany, Australia, Spain, South Korea, Canada, Japan, Belgium, Russia and China.
- Apart from its export potential, the gherkin industry plays a key role in the creation of rural employment.
- In India, cultivation of gherkins is carried out under contract farming by around 90,000 small and marginal farmers with an annual production area of 65,000 acres.
Gherkins are exported under two categories -- cucumbers and gherkins.
- Gherkin cultivation, processing and exports started in India during the early 1990s with a modest beginning in Karnataka and later extended to the neighbouring states of Tamil Nadu, Andhra Pradesh and Telangana.
7. Indian Start-ups raised a record $24.1 billion in 2021
Tags: Economics/Business
According to the Nasscom-Zinnov report released on 21st January 2022, Indian startups raised a record $24.1 billion in 2021, a two-fold increase over pre-Covid levels, while $6 billion were raised via public markets with 11 startup IPOs.
- The Indian tech startup base continues to witness steady growth, adding over 2250 startups in 2021, which is 600 more than 2020.
- India, accounting for 70 unicorns, added a record number of new unicorns (42) in 2021 across 18 sectors, third-highest after the US and China, with a cumulative valuation of newly-added unicorns standing around $90 billion.
- “In comparison to 2020, there was a 3X increase in the number of high-value deals (deals over $100 million), demonstrating investor confidence,” according to the Nasscom-Zinnov report.
- The US remains the leading source of foreign direct investment in start-ups.
- The start-up ecosystem saw a 2X gain in cumulative valuation from 2020 to 2021, with an estimate of $320-$330 billion, demonstrating the sector’s development and recovery throughout the pandemic.
- In comparison with the United Kingdom, the United States, Israel and China, 2021 has been an outstanding year for the Indian Start-up ecosystem.
- Established start-up centres like Delhi-NCR, Bengaluru, Chennai, Pune, Hyderabad and Mumbai account for 71 percent of all startups.
- Outside of the developing start-up centres like Jaipur, Kochi, Kolkata, Chandigarh, and others, 29 percent of all startups are located.
- At least one-woman founder/co-founder is present in 12-15 percent of start-ups and 10 unicorns.
- In terms of maturity and investments, BFSI, Retail and Retail Tech, Enterprise Tech, and EdTech reign supreme.
About Nasscom
The National Association of Software and Service Companies (Nasscom) is an Indian non-governmental trade association and advocacy group focused mainly on the technology industry of India.
Chairperson: U.B. Pravin Rao
President: Debjani Ghosh
Headquarters: New Delhi
About Zinnov
Zinnov is a global management consulting and strategic advisory firm that works across the globe in the areas of Globalization, Digital Engineering, Global Talent, and Transformative Technologies.
CEO and Founder: Pari Natarajan
Headquarters: Santa Clara, California, USA
8. Centre sanctions 973.74 Crore to SBI for compensation payment to borrowers
Tags: Economics/Business
The Union Cabinet led by Prime Minister Narendra Modi approved the sanction of 973.74 Crore to State Bank of India (SBI) as reimbursement related to the loan moratorium that was implemented in 2020 amid the corona pandemic.
What is the Issue
Reserve Bank of India On March 27, 2020 announced a loan moratorium for selected customers who were facing financial difficulties due to pandemic induced lock down and its detrimental consequences on economic activities throughout the country. The selected borrowers were offered an option not to pay their loan for a period from 1 March 2020 till 31 August 2020. However the banks continued to charge compound interest and also levied penalty interest for non payment of loans by customers during the 6 month moratorium period This action of the bank was challenged in the Supreme Court.
Supreme Court Judgement
The Supreme Court in its judgement delivered on 23 March 2021, ruled that banks cannot charge penalty on interest for accounts that sought moratorium relief during the pandemic period last year and the amount collected must be refunded by the banks to the customer account . It also refused to waive interest during the moratorium period.
Government Scheme to help the Banks
Due to the Supreme Court judgement the banks had to refund the collected penalty interest amount to the customer and forgo the penalty interest . This created a burden on the already troubled Banking system in the country . To provide relief to the banks ,Government of India in October 2020 announced “ Scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts (1.3.2020 to 31.8.2020)”.
Main Points of the scheme
- Under this scheme the government of India will compensate the banks which had suffered loss due to Supreme Court Judgement and the Government will pay the difference between compound interest and simple interest for the six months of loan moratorium period on loans upto Rs 2 Crores .
- The Government of India made SBI the nodal bank under this scheme
- The Banks were asked to submit their claims to the SBI and through SBI ,the Government will reimburse the banks .
- Initially the Government of India provided Rs 5500 crore for this claim which was later distributed to the banks through SBI .
- However fresh claims of Rs 973.74 crore have been received by SBI from the banks and to meet the demand Government of India has provided Rs 973.74 crore to SBI.
9. NSE is the world's largest derivatives exchange for the third consecutive year
Tags: Economics/Business
The National Stock Exchange of India has emerged as the world's largest derivatives exchange for the third consecutive year in 2021 in terms of the number of contracts traded, according to the Futures Industry Association (FIA).
- Around 17.3 billion derivatives contracts were traded on the NSE in 2021, nearly double that of 8.9 billion traded in 2020
- The country’s top bourse was ahead of the USA’s CME Group and Brazil’s B3.
- Technically, the number of derivatives contracts traded in the USA is far higher, but liquidity is fragmented among different trading venues, such as the CME Group, Nasdaq, and CBOE group.
- The NSE’s most successful derivatives offerings were Bank Nifty (Rank 1 within Index options category) and the Nifty50 index (Rank 2 within Index options category), which generated the highest volume globally at an individual product level.
- The US Dollar – Indian Rupee options contract ranks 1st by the number of contracts traded in the currency options category.
- In addition, the exchange was ranked fourth by the number of trades in cash equities, as per the statistics maintained by the World Federation of Exchanges (WFE) for 2021.
- NSE has recently announced the launch of derivatives on the Nifty Midcap Select index from January 24, 2022.
What are Derivatives
In finance, Derivatives are an arrangement or product (such as a future, option, or warrant) whose value derives from and is dependent on the value of an underlying asset, such as a commodity, currency, or security.
10. Reliance Jio overtakes BSNL as the largest fixed-line broadband provider
Tags: Economics/Business
Reliance Jio has toppled 20 -year-old state-run telecom company BSNL as the largest fixed-line broadband provider, in just about two years of its commercial rollout.
- The segment had been dominated by the state-run telecom since its inception about 20 years ago
- Jio now leads the fixed-line broadband segment with 4.34 million customers, according to a monthly telecom subscribers report released by the Telecom Regulatory Authority of India(TRAI)
- BSNL stands second in the list with 4.2 million subscribers, whereas Sunil Bharti Mittal-led Bharti Airtel ranks third with a 4.08 million customer base.
