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Business News: Latest updates about business and economy in India

Apple Inc's annual sales in India hit a record of almost $8 billion in the recently concluded financial year 2023-24, reported Bloomberg, quoting a person familiar with the data. Apple's India revenue jumped about 33% in the 12 months through March from $6 billion a year earlier, the Bloomberg report said. The iPhone maker is going big in India, a key market with a large population, and is the fastest growing among major economies. Notably, Apple now assembles its newest varieties of iPhones here in India. The iPhone maker has two flagship stores in India--one in Delhi and one in Mumbai--launched in 2023. Apple's pricey iPhones accounted for more than half of the sales, said the person, who asked not to be named as the information isn't public, Bloomberg reported. In 2017, Apple started manufacturing iPhones in India. The Production Linked Incentive (PLI) scheme by the Central Government is also likely to have attracted several gadget makers, including Apple, to set up shop in the country. Apple's iPhone exports have reportedly surged from $6.27 billion in the fiscal year 2022-23 to $12.1 billion in 2023-24. Faced with supply chain disruptions, particularly since the COVID pandemic hit in 2020 and the subsequent flare-up of geopolitical tensions that still continue, many leading global companies, in particular those that are in the manufacturing space, are diversifying their operations across regions. These visible trends of business diversification are basically to reduce risk and increase flexibility. Apple is also targeting India as a way to diversify its manufacturing and revenue sources beyond China. For companies in such situations, it means exploring emerging global supply chain regions for diversification, and India, given its political stability and huge market opportunity with a dynamic workforce and a steady rise in income levels, is eyed as one of the best places to set up manufacturing bases. India continued to remain the fastest-growing major economy and is poised to maintain its growth trajectory going ahead. India's economy grew 8.2% in 2023-24, 7.2% in 2022-23, and 8.7% in 2021-22, respectively. The size of India's GDP is currently ranked 5th, after the US, China, Germany, and Japan. It overtook the UK in 2022. Just a decade ago, Indian GDP was the eleventh largest in the world. Currently, India's GDP is estimated to be around $3.7 trillion. India eyes $5 trillion in the near term. <meta content="cms.next" name="cmsei" />

Apple's sales in India, a key market, surge to record USD 8 billion: Bloomberg

<ul><li>India’s GDP has contracted by 7.3% over the past one year as per provisional estimates released by the National Statistical Office (NSO) on May 31.</li><li>It’s been four decades since India’s GDP was in the red the last time, but even then the drop was only 5.2%.</li><li>India’s GDP for 2020-21 has taken the biggest hit in the country’s history.</li></ul>The Asian giant’s gross domestic product (GDP) has contracted by 7.3% in 2020-21 — and that’s the biggest dip India has seen since its independence in 1947. India’s GDP growth had already been slowing down for nearly half a decade. The unexpected onset of the COVID-19 pandemic compounded the stress on the economy with lockdowns and limitations on movement to drag the economy into the red— something that hasn’t happened since 1979. <div type="image" title="covid cremation_edited" msid="83135670" hostid="261" caption="&amp;lt;p&amp;gt;States in India have been accused of under-reporting the actual death toll due to COVID-19&amp;lt;/p&amp;gt;"></div> In fact, India has only ever registered negative growth five times in its history. And most of these recessions were driven by droughts, floods or energy prices that threw the country’s primarily agrarian economy off its axis. “Needless to say, the economic outlook remains highly uncertain, and periodic material revisions to our growth forecasts may persist in FY2022, as was the case in FY2021,” Aditi Nayar, the chief economist at ICRA, said in a statement. “At present, we expect real GDP to expand in the range of 8-9.5% in FY2022.” <cmsannotation type="cmsannotation" annotationid="The last time India’s economy saw red" comment="subhead" text="The last time India’s economy saw red">The last time India’s economy saw red</cmsannotation> Just before the 80s kicked in, India was facing a massive crisis at home with a severe drought beating down in most parts of the country. To add to its trouble, crude oil prices had nearly doubled due to supply disruptions — a result of the Iranian revolution happening in the Gulf. The events of 1979, until today, were the worst that the Indian economy has seen since its independence with the GDP contracting by 5.2%. <cmsannotation type="cmsannotation" annotationid="Only two sectors managed to grow — that too barely" comment="subhead" text="Only two sectors managed to grow — that too barely">Only two sectors managed to grow — that too barely</cmsannotation> Gross value added (GVA) is the share of contribution by different sectors of the economy towards the overall GDP. Nearly every single sector of the Indian economy recorded a dip in their GVA during the COVID year — except for two, ‘agriculture, forestry and farming’ alongside ‘electricity, gas, water supply and other utility services.’ <div type="image" title="strawberries_edited" msid="83135715" hostid="261" caption="&amp;lt;p&amp;gt;Farmers in Srinagar, Jammu and Kashmir, picking strawberries amid the lockdown after the second wave of COVID-19 hit India&amp;lt;/p&amp;gt;"></div> Simply put, the only two sectors that were able to keep their head above water are the two sectors that provide basic necessities — food, water, electricity, and gas. Meanwhile the tourism industry, communications, transport and other services within that bucket took the biggest hit. It recorded a dip of 18.2% in the last year after being the third-fastest growing sector in 2019-20. <cmsannotation type="cmsannotation" annotationid="Now, all eyes on RBI" comment="subhead" text="Now, all eyes on RBI">Now, all eyes on RBI</cmsannotation> With India’s GDP growth in the troughs, there will be more pressure on the government to revive economic growth. One way of doing that would be to increase the money supply in the economy. That would fall under the purview of the Reserve Bank of India (RBI), which is scheduled to review its credit policy this week. Typically, the central bank improves the money supply by either cutting interest rates or by making borrowing easier. Both measures, in theory at least, are meant to increase access to credit. More credit means more funds that can be deployed for anything from setting up or expanding a factory to buying a home or a car. All of these contribute to economic activity and growth. On the flip side, an increase in money supply also leads to inflation — even though there is more money to go around, it is still chasing the same amount of goods and services. It’s kosher as long as the growth is well above the rate of price rise. If it’s not, one way to tackle high inflation is to increase interest rates — the exact opposite of what is needed to increase money supply. And therein lies the conundrum. <div type="image" title="das_edited" msid="83135730" hostid="261" caption="&amp;lt;p&amp;gt;RBI Governor Shaktikanta Das&amp;lt;/p&amp;gt;"></div> In the interest of economic growth, the system needs an interest rate cut meanwhile inflation data may signal the need for an interest rate hike. And, how to balance this catch-22 situation is for RBI governor Shaktikanta Das and the Monetary Policy Committee (MPC) to figure out using its credit policy. If the panel decides to pump in more money into the economy — slash interest rates — it could worsen inflation and make essentials like food and fuel more expensive resulting in a double whammy for the average consumer. However, indecision isn’t always bad. One expert believes that it would be ideal for the MPC to just wait and watch. “Despite CPI [Consumer Price Index] being on the higher side the RBI is unlikely to raise interest rates any time soon, even though the current monetary policy regime primarily targets inflation,” said Alok Sheel, the RBI chair professor at the Indian Council for Research in International Economic Relations (ICRIER) in a statement. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/backed-by-mukesh-ambani-infibeam-expects-business-to-grow-manifold-to-100-billion-dollars/articleshow/83111869.cms">INTERVIEW: With a partner like Mukesh Ambani's Jio, Infibeam expects to hit $100 billion in online transactions in the next 5 years</a> <a href="https://www.businessinsider.in/stock-market/news/former-hdfc-bank-ceo-aditya-puri-and-carlyle-will-be-among-the-new-owners-of-pnb-housing-finance-triggering-an-open-offer/articleshow/83105948.cms">Former HDFC Bank CEO Aditya Puri and Carlyle will be among the new owners of PNB Housing Finance triggering an open offer</a> <meta content="cms.next" name="cmsei" />

India’s GDP has contracted five times since 1947, but never as bad as 7.3%

New Delhi, Moody's Investor Service on Thursday revised the contraction rate of India's FY21 GDP to (-) 10.6 per cent from an earlier estimate of (-) 11.5 per cent. The revision comes days after the Centre announced new stimulus measures. Besides, Moody's revised the forecast for the next financial year ending March 2022. It now estimates a growth of 10.8 per cent from a rise of 10.6 per cent, which was predicted earlier. "The latest measures (stimulus) aims to increase the competitiveness of India's manufacturing sector and create jobs, while supporting infrastructure investment, credit availability and stressed sectors," Moody's said. "As such, they present potential upside to our current growth forecasts, a credit positive." According to the ratings agency, consumer confidence in India remains relatively low amid a continued elevated number of daily new coronavirus cases, "although this has come down from a peak in September". SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/zomato-is-being-pulled-apart-in-a-polarised-india-for-pushing-advertising-money-to-backing-a-partisan-news-outfit/articleshow/79296969.cms">Zomato is being pulled apart in a polarised India⁠ for pushing advertising money to back a partisan news outfit</a> <a href="https://www.businessinsider.in/finance/banks/news/lakshmi-vilas-bank-is-the-fifth-financial-firm-after-ilfs-dhfl-yes-bank-and-pmc-bank-to-collapse-in-india/slidelist/79286096.cms">Lakshmi Vilas Bank is the fifth financial firm to collapse in India within the last 30 months</a> <a href="https://www.businessinsider.in/science/health/news/pfizers-new-covid-19-vaccine-is-95-effective-and-the-only-severe-side-effect-to-worry-about-is-fatigue-according-to-the-final-results/articleshow/79284286.cms">Pfizer's new COVID-19 vaccine is 95% effective and the only severe side-effect to worry about is fatigue, according to the final results</a> <meta content="cms.next" name="cmsei" />

Moody's revises India's FY21 GDP contraction to -10.6% after government announces new stimulus measures

India has technically entered into a recession with a likely contraction in its GDP during the July-September period, according to a report by the Reserve Bank of India (RBI). RBI's Economic Activity Index estimates that India's GDP growth for the second quarter of the current financial year was negative and the GDP contracted by 8.6 per cent during the quarter. "India has entered into a technical recession in the first half of 2020-21 for the first time in its history with Q2:2020-21 likely to record the second successive quarter of GDP contraction," it said. The contraction is ebbing with gradual normalisation in activities and expected to be short-lived. The RBI report said that at a time when global economic activity is besieged by the outbreak of the second wave of Covid-19, incoming data for the month of October 2020 have brightened the near-term outlook for the Indian economy and stirred up consumer and business confidence. "Since the assessment of the performance of the Indian economy in the first half of 2020-21 that was presented in the Monetary Policy Report of October 2020, several developments point to a window of respite opening up and an unshackling of economic activity from the grip of Covid-19 as the festival season sets in," it said. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/google-photos-will-no-longer-offer-free-and-unlimited-photo-uploads-starting-june-next-year/articleshow/79184955.cms">Google Photos' most endearing feature is going out the window starting June next year</a> <a href="https://www.businessinsider.in/india/news/psu-bank-employees-wage-revision-finalised-after-three-years-of-waiting-only-a-1500-increase-in-salary-for-officers/articleshow/79166497.cms">PSU bank employees wage revision finalised after three years of waiting — only a ₹1,500 increase in salary for officers</a> <a href="https://www.businessinsider.in/tech/apps/news/instagram-down-users-complain-of-frozen-timelines-and-likes/articleshow/79146012.cms">Instagram down for a second consecutive day — Facebook is working on a fix but has not disclosed what's wrong</a> <meta content="cms.next" name="cmsei" />

RBI reports India has entered a technical recession for the very first time

The world is experiencing one of the deepest recessions since the Great Depression in the 1930s owing to the novel coronavirus, World Bank President David Malpass has said, terming the COVID-19 pandemic a "catastrophic event" for many developing and the poorest countries. He told reporters that given the extent of the economic contraction, there was a rising risk of disruptive debt crises in countries. So that has got a lot of focus here at the meetings, Malpass told the media on Wednesday at the start of the annual meetings of the International Monetary Fund and the World Bank. "The recession has been deep, one of the deepest since the Great Depression. And for many developing countries, and for the people in the poorest countries, it is truly a depression, a catastrophic event. It is continuing to add to the ranks of those in extreme poverty," he said. That is the focus of this meeting and the focus of their actions, he said, adding that the World Bank was building as big a growth programme for countries as they can in this fiscal year. A day earlier, the Board approved the extension of the health emergency programmes to up to USD 12 billion for vaccines and therapeutics and distribution of those in countries that do not otherwise have access. Responding to a question, Malpass said that the world was currently experiencing a K-shaped recovery. That means that the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home. But people that are in the informal economy have lost their jobs, and are depending on social protection programmes, he said. For the developing countries, and especially the poorest developing countries, that downward leg in the K is an increasingly desperate recession or depression that is facing people in the poorest countries because of the loss of jobs, the loss of income, and also the loss of remittances coming from workers, working outside the country, Malpass said. "What we're trying to do at the World Bank is recognise that problem and provide extra support for social protection for the poorest in countries, also recognising the agricultural challenges," he said. The president welcome countries that are keeping open their export markets, and also countries that are able to change their subsidy systems in order to allow more food availability within their economies during this very challenging time. Malpass said that the first priority was saving lives, people's health, and safety. That involves procedures that have been widely discussed of social distancing and masks and proper health care if people contract the virus, strengthening of hospital systems and so on. All of those are important, he asserted. "And then, as we look at the next stage, what I think we can be talking about is that it's going to be a prolonged downturn for many of the countries, there won't be as fast a rebound in tourism, for example, as many would like to have," he said. There will need to be flexibility in economies, so that people can move to new jobs and positions, and the country can be prepared for a post COVID-19 global economy, Malpass said. Acknowledging that it is going to be different from the pre-COVID-19 economy, he noted that one does not know exactly how and that will only evolve over time. "And so, having countries preserve some of their core industries and businesses, and then keeping families together. We're providing social safety nets to try to help provide cash grants for people, for example, in Brazil, we have a sizable programme. In Jordan, we support Jordan's sizable programme and elsewhere around the world," he said. The World Bank is encouraging countries to spend in the first instance on health programmes, on social programmes, and on education, Malpass said, adding that a critical step for countries is to reopen schools. "We think there are as many as a billion children still out of school in the developing world. And in those cases, learning goes backward, which has a huge future cost for countries. This is particularly true for girls that are left out at a critical point in their lives, left out of school. That's a high priority," he said. Now, looking longer term, infrastructure is a very important part of a country's growth, he said. "We have a large undertaking through the IFC that works on infrastructure that helps provide electricity and low carbon ways, for example, that helps provide clean water, that helps provide global public goods, meaning helping the country reach a balance with the environment and with the climate that benefits themselves and their neighbours. All of those are key priorities," he said. On infrastructure, one of the challenges is they have a very low interest rate environment, and it should be an environment that provides much more infrastructure investment than is currently occurring, Malpass said. "A key step in this is the documentation and the standardisation of the quality of the infrastructure projects. It's vital that the world move toward a financing structure where multiple infrastructure projects can be pooled in order to reduce the risk to the entire package, and that's difficult right now because of the difference in the contracts. "So, one of the things we've wanted to do is try to help standardise some of the contracting and make it much more transparent. This will help the infrastructure build up," he said. 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World Bank President says COVID-19 pandemic is causing the one of the deepest recessions since Great Depression

The gap between government's total income and expenditure is expected to balloon to Rs 14.6 lakh crore (approximately $200 billion) or 7.6 per cent of GDP in FY21 as economic disruptions are set for a long haul due to Covid-19 pandemic, brokerages analysing the deficit numbers said. The Controller General of Accounts early this month said that the country's fiscal deficit has expanded to 103.1 per cent of Budget Estimate in the April-July period primarily due to lower tax collection and higher expenditure for Covid-19 relief. The signals are clear indicators that the fiscal deficit would break all previous records to jump to over double the budget targets in FY21. According to an EcoScope report by Motilal Oswal Financial Services, the higher 7.6 per cent fiscal deficit this year would be on account of an 18 per cent YoY contraction in total receipts and eight per cent growth in total spending. During an emergency economic situation, it is always the increased government spending that helps to prop up the investment climate and boost demand in the economy. But worrisome aspect this year during the pandemic is that the government spending is expected to be highly skewed towards revenue (or current) spending this year with economic boosters capital expenditure on a decline. The brokerage report showed that while revenue spending (largely to pay salary and pension bills) of the government could grow at 10 per cent in FY21, capital spending could decline by 2-3 per cent. If this trend continues, capital spending could suffer further and decline five per cent YoY in the remaining eight months of FY21 (v/s 3.9 per cent growth over April-July'20). On the other hand, revenue spending would grow eight per cent over the August'20-March'21 period (v/s 12.2 per cent growth over April-July'20). The brokerage expects real GDP to contract seven per cent YoY in 2QFY21, worse than the earlier forecast of (-) 4.7 per cent, but certainly better than the growing consensus of another double-digit decline in real GDP. Consequently, the real GDP could decline to (-) 6.5 per cent YoY for the full-year FY21, marking the worst fall in the past seven decades. Also, India's nominal GDP is likely to contract to (-) 5.3 per cent this year, marking its first contraction in 65 years, following the slowest growth seen in 48 years (7.2 per cent in FY20). Motilal Oswal had projected that India's headline inflation would remain at six per cent up to July'20, before easing to four per cent by December'20. Due to Covid-19, the expectation was that that headline inflation would ease to three per cent by December'20. However, with headline inflation at 6.7 per cent YoY each in July'20 and August'20, the brokerage has revised its forecasts upward. Consequently, fresh calculations suggest headline inflation is unlikely to fall below 4.5 per cent in FY21. With the massive slowdown in the global and domestic economic environments, it is broadly expected that inflationary pressures would also subside substantially. While headline inflation has actually subsided in most nations, it has risen in Russia and Mexico and remained elevated in India and Turkey. SEE ALSO: <a href="https://www.businessinsider.in/sports/news/dailyhunt-app-founders-confirm-ipl-2020-associate-sponsorship/articleshow/78169667.cms">EXCLUSIVE: Dailyhunt founders confirm IPL 2020 associate sponsorship — promise new release for Josh ahead of India’s biggest cricket tournament</a> <a href="https://www.businessinsider.in/defense/news/latest-updates-on-india-china-border-issue/articleshow/78162853.cms">Chinese air drills in Lhasa, Chinese propaganda against Rajnath Singh and other latest updates on the India-China border issue</a> <a href="https://www.businessinsider.in/stock-market/markets/news/hcl-tech-enters-the-list-of-top-10-most-valued-companies-in-india/articleshow/78165311.cms">HCL Tech enters the list of top 10 most valued companies in India</a> <a href="https://www.businessinsider.in/science/space/news/jupiters-red-spot-junior-is-ready-to-change-colors-turning-brick-red-yet-again/articleshow/78181222.cms">Jupiter's Red Spot Junior is ready to change colors — turning brick-red yet again</a><meta content="cms.next" name="cmsei" />

India’s fiscal deficit could hit $200 billion by the end of the financial year

Retail inflation softened slightly to 6.69 per cent in August, even as food prices continued to rule high, official data showed on Monday. The government has revised downwards the retail inflation for July to 6.73 per cent from the earlier estimate of 6.93 per cent. Food inflation during the month stood at 9.62 per cent. Food inflation in August fell marginally to 9.05 per cent, according to the Consumer Price Index (CPI) data. The retail inflation, mainly taken into account by the RBI to arrive at its policy decisions, has been above the regulator's comfort level. The government has mandated the central bank to restrict the inflation at 4 per cent (+/- 2 per cent). SEE ALSO: <a href="https://www.businessinsider.in/tech/news/its-not-just-india-chinese-intelligence-has-its-eye-on-more-than-2-4-million-individuals-across-the-us-japan-canada-australia-and-the-uk/articleshow/78101034.cms">It's not just India — Chinese intelligence has its eye on more than 2.4 million individuals across the US, Japan, Canada, Australia, and the UK</a> <a href="https://www.businessinsider.in/defense/news/india-china-border-tension-will-be-in-focus-as-the-parliaments-monsoon-session-begins-today/articleshow/78098575.cms">India-China border tension will be in focus as the Parliament's Monsoon session begins today</a> <a href="https://www.businessinsider.in/finance/banks/news/all-eyes-on-parliaments-monsoon-session-the-banking-regulation-amendment-bill-2020-may-not-be-on-the-docket-for-long/articleshow/78101791.cms">All eyes on Parliament's Monsoon session — the Banking Regulation (Amendment) Bill 2020 may not be on the docket for long</a> <a href="https://www.businessinsider.in/stock-market/news/hcl-tech-share-price-jumps-after-mid-quarter-guidance-pulling-tcs-infosys-wipro-and-tech-mahindra-in-the-green-along-with-it/articleshow/78103743.cms">HCL Tech's mid-quarter guidance optimism sparks rally in TCS, Infosys, Wipro, and Tech Mahindra too</a><meta content="cms.next" name="cmsei" />

Retail inflation softens marginally to 6.69% in August

High food, fuel and manufactured goods' prices accelerated India's August wholesale inflation, official data showed on Monday. On sequential level, India's annual rate of inflation based on wholesale prices rose to 0.16 per cent in August from (-) 0.58 per cent in July. On a year-on-year (YoY) basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry had risen to 1.17 per cent during the corresponding period of the previous year. "The annual rate of inflation, based on monthly WPI, stood at (0.16 per cent)(Provisional) for the month of August, 2020 (over August, 2019) as compared to 1.17 per cent during the corresponding month of the previous year," the Ministry said in its review of 'Index Numbers of Wholesale Pr ice in India' for August. In the notes to WPI August, the ministry said: "The WPI for August 2 020, have been compiled at a weighted response rate of 76 per cent, while the final figure for June, 2020 is based on the weighted response rate of 88 per cent." On a sequential basis, the expenses on primary articles, which constitute 22 .62 per cent of the WPI's total weightage, increased 1.60 per cent from 0.63 per cent in July 2020. Furthermore, the prices of food items remained at elevated levels with a rise of 4.07 per cent from 4.32 per cent reported for July. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/its-not-just-india-chinese-intelligence-has-its-eye-on-more-than-2-4-million-individuals-across-the-us-japan-canada-australia-and-the-uk/articleshow/78101034.cms">It's not just India — Chinese intelligence has its eye on more than 2.4 million individuals across the US, Japan, Canada, Australia, and the UK</a> <a href="https://www.businessinsider.in/defense/news/india-china-border-tension-will-be-in-focus-as-the-parliaments-monsoon-session-begins-today/articleshow/78098575.cms">India-China border tension will be in focus as the Parliament's Monsoon session begins today</a> <a href="https://www.businessinsider.in/finance/banks/news/all-eyes-on-parliaments-monsoon-session-the-banking-regulation-amendment-bill-2020-may-not-be-on-the-docket-for-long/articleshow/78101791.cms">All eyes on Parliament's Monsoon session — the Banking Regulation (Amendment) Bill 2020 may not be on the docket for long</a> <meta content="cms.next" name="cmsei" />

Food, fuel and manufactured goods got more expensive in August as compared to July

India's economy is expected to contract 10.5 per cent in the current fiscal before bouncing back in the next financial year, Fitch Ratings said on Tuesday. India's gross domestic product (GDP) contracted by a massive 23.9 per cent in April-June and some agencies have predicted negative growth even during the July-September quarter of the current fiscal (April 2020 to March 2021). "GDP should rebound strongly in 3Q20 (October-December) amid a re-opening of the economy, but there are signs that the recovery has been sluggish and uneven," Fitch said in its Global Economic Outlook (GEO). It slashed its GDP forecast for the current fiscal to 10.5 per cent, a huge revision of (-) 5 percentage points compared to the June GEO. The economy, it said, will recover to 11 per cent in 2021-22 largely owing to base effect and grow by 6 per cent in the following year. Separately, India Ratings and Research, the domestic arm of rating agency Fitch, projected an 11.8 per cent contraction in the Indian economy in FY21, as against its previous projection of 5.3 per cent contraction in the current fiscal. Indian economy had grown at 4.2 per cent in the 2019-20 fiscal. It projected an 11.9 per cent contraction in the current quarter, followed by a (-) 6.7 per cent growth in the December quarter and 5.4 per cent in the following three months. According to India Ratings, GDP will bounce back to 9.9 per cent growth in FY22 helped mainly by a weak base of FY21. It estimated economic loss in FY21 at Rs 18.44 lakh crore. In another report, Morgan Stanley projected a contraction of 5 per cent in the Indian economy in calendar year 2020 from 4.9 per cent in 2019. The economy will, however, bounce to 9.5 per cent growth in 2021, it said, predicting that a V-shaped recovery in the global economy was playing out faster than originally thought. "By 2Q21, a global synchronous recovery should take hold, with all engines of the global economy registering strong growth," it said. "Risks to our view include a potential aggressive lockdown in the winter and uncertainty about fiscal policy." India Ratings projected fiscal deficit expanding to 8.2 per cent of GDP in FY21, from 4.6 per cent in the previous fiscal. Fitch Solutions, an affiliate of Fitch Ratings, revised its FY2020-21 central government fiscal deficit forecast to 8.2 per cent of GDP, from 7.2 per cent previously. In the September GEO, Fitch Ratings said India, UK (-21.7 per cent) and Spain (-22.1 per cent) were the nations that saw the deepest recessions in April-June. "GDP destruction was felt far and wide," it said adding the coronavirus pandemic has become more prevalent in emerging market countries excluding China as the year has progressed. "India imposed one of the most stringent lockdowns worldwide in 2Q20 (April-June) and domestic demand fell massively. Limited fiscal support, fragilities in the financial system, and a continued rise in virus cases hamper a rapid normalisation in activity," it noted. "We do not expect GDP to return to pre-virus levels until 1Q22," it said. During April-June, Fitch said India saw all demand components except government consumption fall massively. "Private consumption lost more than 27 per cent quarter-on-quarter (QoQ), investment slumped an eye-watering 43 per cent QoQ." While GDP should rebound strongly in the next quarter, still-depressed levels of imports, two-wheeler sales, and capital goods production indicate a muted recovery in domestic spending, it said. Fitch said, the continued spread of the virus and the imposition of sporadic shutdowns across the country depress sentiment and disrupt economic activity. "The severe fall in activity has also damaged household and corporate incomes and balance sheets, amid limited fiscal support. A looming deterioration in asset quality in the financial sector will hold back credit provision amid weak bank capital buffers," it said. Furthermore, high inflation has added strains to household income. Supply-chain disruptions and excise duties increases have caused prices to rise. "However, we expect inflation to slow amid weak underlying demand, an easing in supply-chain disruptions and a good monsoon," it added. In another report, Goldman Sachs cut its FY21 India GDP forecast to a contraction of 14.8 per cent. It had earlier estimated the economy of the country, which is now home to the second largest number of COVID-19 infections, to contract by 11.8 per cent. "India's GDP hit from COVID-19 the highest across major economies," analysts at the brokerage said. 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Four ratings agencies see double-digit contraction in India's GDP for the whole year

New Delhi, Sep 8 () Fitch Ratings on Tuesday projected a massive 10.5 per cent contraction of India's economy in the current financial year. India recorded one of the sharpest gross domestic product (GDP) contractions in the world in April-June. India's GDP shrank by a staggering 24 per cent year-on-year amid the imposition of one of the most stringent global nationwide lockdown. "GDP should rebound strongly in 3Q20 (October-December) amid a re-opening of the economy, but there are signs that the recovery has been sluggish and uneven," Fitch said. "We have slashed our GDP forecast for this fiscal year to (-) 10.5 per cent, a huge revision of (-) 5pp compared to the June Global Economic Outlook (GEO)," it said. Fitch had earlier projected India's GDP to contract 5 per cent this fiscal. SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/five-things-that-raghuram-rajan-believes-can-help-india-counter-its-recent-dip-in-gdp/slidelist/77975115.cms">Five things that Raghuram Rajan believes can help India counter its recent dip in GDP</a> <a href="https://www.businessinsider.in/policy/economy/news/what-is-gdp-and-how-to-calculate-india-gdp-and-why-gdp-calculation-is-important-for-any-country-growth/articleshow/77891831.cms">Explainer: Why GDP matters and how India uses two methods to calculate it</a><meta content="cms.next" name="cmsei" />

India's GDP will plummet by 10.5% this fiscal year forecasts Fitch Ratings

Government consumption is expected to continue "pandemic-proofing" of demand, the Reserve Bank said on Tuesday. In its Annual Report 2019-20, the Reserve Bank of India said that when the demands gets stabilised, private consumption is likely to lead the recovery. "Going forward, government consumption is expected to continue pandemic-proofing of demand, and private consumption is expected to lead the recovery when it takes hold, with non-discretionary spending leading the way unt il a durable increase in disposable incomes enables discretionary spending to catch up," it said. An assessment of aggregate demand during the year so far suggests that the shock to consumption is severe, and it will take quite some time to mend and regain the pre-Covid momentum, as per the report. It noted that private consumption has lost its discretionary elements across the board, particularly transport services, hospitality, recreation and cultural activities and behavioural restraints may prevent the normalisation of demand for these activities. The Reserve Bank's survey for the month of July indicates that consumer confidence fell to an all-time low, with a majority of respondents report ing pessimism relating to the general economic situation, employment, inflation and income; however, respondents indicated expectations of recovery for t he year ahead. "Urban consumption demand has suffered a bigger blow - passenger vehicle sales and supply of consumer durables in Q1: 2020-21 have dropped to a fifth and one third, respectively, of their level a year ago; air passenger t raffic has ground to a halt. Rural demand, by contrast, has fared better,a it said. Among underlying indicators, tractor sales picked up by 38.5 per cent in July, spurred by the robust pace of kharif sowing, while the contraction in mot orcycle sales eased in July -- from 35.2 per cent in June to 4.9 per cent in July. The decline in production of consumer non-durables turned positive in June. A fuller recovery in rural demand is, however, being held back by muted wage growth which is still hostage to the migrant crisis and associated employment losses. Initiative under the Pradhan Mantri Garib Kalyan Rojgar Abhiyaan is likely to generate employment in rural areas. Along with increased wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), they should provide a fillip to rural incomes, said the RBI report. On production activity, RBI noted that Indian agriculture is undergoing a distinct transformation, notwithstanding headwinds. "Going forward, shifting the terms of trade in favour of agriculture is the key to sustaining this dynamic change and generating positive supply responses in agricultural production. Experience shows that in periods when the terms of trade remained favourable to agriculture, annual average growth in agricultural gross value added (GVA) exceeded 3 per cent," the report said. "Hitherto, the main instrument of incentive has been minimum support prices, but the experience has been that price incentives have been costly, inefficient and even distortive. India has now reached a stage in which surplus management has become a major challenge. The priority is to move to pol icy strategies that ensure a sustained increase in farmers' income alongside reasonable food prices for consumers. An efficient domestic supply c hain becomes critical here. As per the report, India's manufacturing has been locked in a structural slowdown for "quite some time". "Reversing this decline warrants a complete rethink. The quality and efficiency of the physical infrastructure, which still significantly lags behind the global median, has to be enhanced to help manufacturing take off," RBI said in the report. "Benchmarking systems and procedures with the best in the world could galvanise growth in the sector, aided by cleaning up of stressed balance sheets of corporates by raising the efficiency of bankruptcy and solvency procedures." In addition, the RBI cited the need to unlock entrepreneurial energies and risk appetite by improving the business environment. "Faster enforcement of contracts, including through expansion of judicial and insolvency capacities, would be a game changer," the report said. "Property registrations can be speeded up from the current 58 days, and a centralised website can provide real time information on all regulatory compliance requirements." "In general, the compliance burden can be streamlined substantial. The COVID-19 crisis can be converted into an opportunity by using online provision of education and training to implement reforms in the social infrastructure by skill development and reskilling so as to prepare a labour force equipped to keep pace with a big thrust on infrastructure." 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Government consumption will continue to 'pandemic-proof' India's demand says RBI

<ul><li>The Reserve Bank of India is reportedly looking to increase the gold reserves of the country to 10%, according to a media report.</li><li>India has gold reserves worth $33.9 billion as of June. </li><li>Here’s a list of countries with the highest gold reserve as of August 2020, <a href="https://www.gold.org/goldhub/data/monthly-central-bank-statistics">according to the latest data</a> from the International Monetary Fund and the World Gold Council. </li></ul>Gold has traditionally been considered as the ‘safe haven’. And with this current uncertainty and economic crisis faced worldwide due to the coronavirus pandemic, global central banks have been gathering on to their stockpiles of this precious metal. The Reserve Bank of India is reportedly looking to increase the gold reserves of the country to 10%, <a href="https://economictimes.indiatimes.com/markets/forex/will-rbi-stop-buying-dollar-pick-gold-instead/articleshow/77582951.cms">according to a media report</a>. Rising gold reserves will <a href="https://www.businessinsider.in/india/faqs/heres-why-reserve-bank-of-india-may-be-looking-to-boost-its-gold-reserve/articleshow/77596299.cms">act as a defence</a> in case the economic crisis worsens in the near future. The RBI is likely to prepare a roadmap and will discuss it further in October. “One of the RBI board members raised the issue on the need to diversify towards gold and less of US securities,” <a href="https://economictimes.indiatimes.com/markets/forex/will-rbi-stop-buying-dollar-pick-gold-instead/articleshow/77582951.cms">sources told ET. </a> Here’s a list of countries with the highest gold reserve as of August 2020, <a href="https://www.gold.org/goldhub/data/monthly-central-bank-statistics">according to the latest data</a> from the International Monetary Fund and the World Gold Council. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Country </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tonnes </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of reserves </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">United States </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8133.5 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">79% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Germany </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,363.6 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">75.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Italy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2451.8 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">71.3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">France </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,436 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">65.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Russian Federation </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,299.9 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.0% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">China, P.R Mainland </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1948.3 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Switzerland </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1040.0 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Japan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">765.2 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">India </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">657.7 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">The Netherlands </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">612.5 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">71.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Turkey </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">583.0 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Taiwan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">422.7 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Portugal </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">382.5 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">77.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Republic of Kazakhstan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">378.5 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">65.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Republic of Uzbekistan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">342.8 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">60% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Saudi Arabia </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">323.1 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">United Kingdom </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">310.3 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lebanon </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">286.8 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">31.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">World </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">35,017.79 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody></table>India has gold reserves worth $33.9 billion in June. Moreover, it has been slightly increasing the total amount of gold reserves since February this year. It added 6.8 tonnes of gold in February, followed by 11.2 tonnes of gold in March, 1.2 tonnes of gold in April, and 2.8 tonnes of gold in May, according to the data. China has been reportedly increasing its gold reserves too. Gold has been among the best performing asset classes this year. It had hit a high of above $2000 an ounce earlier this month. SEE ALSO: <a href="https://www.businessinsider.in/careers/latest-job-openings-at-google-microsoft-jp-morgan-goldman-sachs-ericsson-amazon-adobe-zomato-for-software-engineers/slidelist/77585263.cms">Google, Microsoft, JP Morgan, Goldman Sachs, Ericsson and other companies hiring software engineers in India right now</a> <a href="https://www.businessinsider.in/politics/world/news/barack-obama-has-privately-voiced-concerns-that-joe-biden-could-f-things-up-according-to-a-report/articleshow/77574349.cms">Barack Obama has privately voiced concerns that Joe Biden could 'f--- things up,' according to a report</a> <meta content="cms.next" name="cmsei" />

These are the 20 countries with the highest gold reserves

<ul><li>The solar and wind power generator has a portfolio of 5,290 megawatts and half of it is operational. In the last three quarters, the company achieved breakeven , and has been showing a steady growth in profits. </li><li>Most of its power sales in long-term contracts with low risk buyers like NTPC and Solar Energy Corporation. </li><li>The risk of construction is much lower in solar and wind projects due to shorter timelines and fewer technological challenges. </li></ul> Adani Green Energy has not just beaten slowdown blues, but also became one of the best performing energy stocks of the year. Even amongst its Adani group stocks which have mostly created value, it is the best performer as it appreciated by 229% during the year. 
 
 
 
 
 
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 The stock appreciation might have made up for Adani Power’s performance whose coal-based portfolio which is facing headwinds. Lighter debt, the company’s decision to divide risk of its green portfolio projects into special purpose vehicles cuts the debt risk of the company. Most of Adani group stocks with the exception of power generation appreciated-- even the transmission arm. But none could match the value appreciation that Green Energy generated especially since October. <table style="border-collapse:collapse;border:none;mso-border-alt:solid black .5pt; mso-border-themecolor:text1;mso-yfti-tbllook:1184;mso-padding-alt:0in 5.4pt 0in 5.4pt"> <tbody><tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> Group Company </td> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-left:none;mso-border-left-alt:solid black .5pt;mso-border-left-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Annual share price appreciation </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Gas </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> 49.5% </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Transmission </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> 70.5% </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Power </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> -24% </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Ports and Special Economic Zone </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> -2% </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Enterprises </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> 38.8% </td> </tr> <tr> <td style="border:solid black 1.0pt;mso-border-themecolor:text1; border-top:none;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor: text1;mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding: 0in 5.4pt 0in 5.4pt"> Adani Green Energy </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; mso-border-bottom-themecolor:text1;border-right:solid black 1.0pt;mso-border-right-themecolor: text1;mso-border-top-alt:solid black .5pt;mso-border-top-themecolor:text1; mso-border-left-alt:solid black .5pt;mso-border-left-themecolor:text1; mso-border-alt:solid black .5pt;mso-border-themecolor:text1;padding:0in 5.4pt 0in 5.4pt"> 229% </td> </tr> </tbody></table> The solar and wind power generator has a portfolio of 5,290 megawatts and half of it is operational. In the last three quarters, the company achieved breakeven , and has been showing a steady growth in profits. 
 
 
 
 
 
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 The risk of construction is much lower in solar and wind projects due to shorter timelines and fewer technological challenges. Moreso, there are a lot of takers for the green power it generates and has long-term sales agreements which provide it with revenue visibility. “AGEL has 62% of the operational and under construction capacity tied up with NTPC and Solar Energy Corporation of India. The balance 38% of the capacity is tied to moderate-to-high credit risk counterparties such as Tamil Nadu Generation and Distribution Corporation Limited, Karnataka State Electricity Board and others,” said a report by India Ratings. <meta content="cms.next" name="cmsei" />

The best Adani stock this year is also the most green one

India's fiscal deficit at the end of October was ₹7.20 lakh crore — that's a little more than what it had aimed for at the end of March 2019. Fiscal deficit is the amount of money spent by the government over and above its earnings. The government had set itself a target of 3.3% in the latest budget in July 2019, after the Narendra Modi government was reelected in May. However, at this stage, it seems that the government's finances will stretched more than it wanted to partly because of slowing economic growth that has led to fall in tax revenues particularly the collection of Goods and Services Tax. Moody's had recently projected that the India's full-year fiscal deficit may be 3.7% of GDP (Gross Domestic Product) or in other words the national income. The higher the fiscal deficit, the more weaker the rupee gets. Rise in fiscal deficit can also increase the government's borrowing expensive. Fiscal deficit is a measure of how prudently the government manages its finances. The deficit can be controlled either by reducing expenses or boosting income in the remaining months of the year. But as it seems right now, the economic growth in the second quarter of the year i.e. between July and September may fall below 5%, according to many estimates. That would be mean a further fall in tax revenue and wider-than-expected deficit. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
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 SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/raghuram-rajan-gave-ideas-on-how-to-revive-economic-growth-in-india/articleshow/71573594.cms" data-type="tilCustomLink" target="_blank">Raghuram Rajan’s recipe to revive India's economic growth</a> <meta content="cms.next" name="cmsei" />

India has overshot its deficit target halfway into the year

<ul><li>
Moody's upgraded India in November 2017, a year after demonetisation, but economic growth has hit a six-year low since then.</li><li>Those who invested based on Moody's upgrade of India would have risked huge losses.</li><li>The current cut in outlook for Indian economy has come after a series of measures by the government to stimulate investment and demand.</li><li>Was 2017 too soon to upgrade India’s credit rating or is 2019 too late to tell people that prospects are bleak?</li></ul>Exactly one year after demonetisation, global credit rating agency Moody’s upgraded India with a ringing endorsement of Prime Minister Narendra Modi’s reforms. But today, three years hence, Moody’s cut the outlook on India’s economic prospects to ‘negative’. Interestingly, the latest cut has come after weeks of continued efforts⁠— from cut in corporate taxes to merging large banks, creating a rescue fund for cash-strapped builders, and other stimulus measures⁠— by the Modi government to revive the economy from the doldrums. However, according to many economists, the current economic slowdown in India has its roots in the ill-advised demonetisation in November 2016, when Prime Minister Modi, in one stroke, banned 86% of all cash circulating in the country. Soon after the note ban came a well-intended but poorly executed rollout of the Goods and Services Tax (GST). Together, they threw the business, payments, and credit cycles for small businesses in the country into complete disarray. But that is when Moody’s upgraded India. The Finance Ministry then celebrated as an endorsement of the ‘Modinomics’. 
	
	
	
	
	<div type="twitter" handle="adhia03" handlename="Dr Hasmukh Adhia" image="http://pbs.twimg.com/profile_images/2925511197/d32f3db60b1b3dc824c5a8befab0f651_normal.jpeg" favoritecount="308" retweetcount="122" status="2/3 The path that Government has chosen for long term reforms and fiscal consolidation is well recognised by investors already." createdat="1510887219000" id="931354618977665024"></div>











 However, as Sensex hit new highs in recent days, expecting a windfall for companies from the recent tax cuts and other measures intended to revive the economy, Moody’s has cut the outlook. Not surprisingly, the Finance Ministry hit back immediately. Just like growth projections, credit ratings are important. It plays a part in an investor’s decision on whether to invest more in a country. It moves borrowing rates on foreign loans. But as <a href="https://www.business-standard.com/article/economy-policy/imf-s-growth-projections-are-80-wrong-eac-pm-member-rathin-roy-117101100846_1.html">pointed out often</a>, the GDP projections⁠— even by reputed institutions like the International Monetary Fund (IMF) ⁠— have been amiss more often than not. In the case of Moody’s, those who invested based on the upgrade in November 2017, a year after demonetisation, must have risked huge losses as the economic growth since then slowed down sharply to a six-year low at the end of June 2019. And the slowdown has been broad-based across sectors like textiles, automobiles, aviation, consumption and many more. 
 
 
 
 
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 While not one data point or factor determine ratings or outlook, the question remains in front of Moody's: was 2017 too soon to upgrade India’s credit rating or is 2019 too late to tell people that prospects are bleak? SEE ALSO: <a href="https://www.businessinsider.in/policy/economy/news/moodys-changes-outlook-on-india-to-negative/articleshow/71966087.cms">Moody's says India's tax cuts, realty rescue, and bailouts are not enough to beat the slowdown</a> <a href="https://www.businessinsider.in/recession-in-india-searches-spike-as-gdp-growth-hits-a-six-year-low/articleshow/70922461.cms">Indians were fearing recession even before data showed that GDP growth hit a six-year low</a> <meta content="cms.next" name="cmsei" />

Upgrade post demonetisation, downgrade post tax cuts⁠— Moody's mood swings expose the economist’s inertia

The Indian rupee opened 5 paise higher at 71.38 against the US dollar in early trade on Thursday tracking positive opening in domestic equities and foreign fund inflows. Forex traders said rupee was trading in a narrow range as market participants remained cautious ahead of the Brexit summit scheduled later this week and on the domestic front, the RBI meeting minutes that will be released on Friday. At the interbank foreign exchange, the rupee opened on a positive note at 71.38 then lost momentum and fell to 71.47 against the US dollar, showing a decline of 4 paise over its previous closing. The Indian rupee on Wednesday had closed at 71.43 against the US dollar. The local unit however gained some strength and was trading at 71.39 against the US dollar at 0953 hours. Forex traders said gains in domestic equities, foreign fund inflows, easing crude prices and optimism about the US-China trade deal supported investor sentiments. Domestic bourses opened on a cautious note on Thursday with benchmark indices Sensex trading 47.33 points higher at 38,646.32 and Nifty up by 3.75 points at 11,467.75. Foreign institutional investors (FIIs) purchased shares worth Rs 686.33 crore on Wednesday, according to provisional exchange data. The dollar index, which gauges the greenback's strength against a basket of six currencies, was unchanged at 97.99. Crude oil benchmark, Brent Futures, eased 0.69 per cent to USD 59.01 per barrel. Meanwhile, on the global front, US President Donald Trump on Wednesday said the partial trade deal agreed with China last week is now being formally put on paper. On Friday last week, Trump said that the US has reached a "very substantial" Phase 1 trade deal with China. Echoing his words, China on Tuesday had asserted that it was on the "same page" with the US on trade as it confirmed that the two countries are likely to sign a "phase one agreement" soon to end their trade war. "It (the deal) hasn't been papered yet, but it is being papered," Trump told reporters at the White House. The 10-year government bond yield was at 6.46 per cent in morning trade. <meta content="cms.next" name="cmsei" />

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