India's Economic Outlook Brightens: Business Confidence Rises, Fiscal Deficit Narrows
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India’s economy shows resilience, despite inflation concerns
The July economic review by the NCAER highlights a robust economic outlook for India, with several positive indicators. The Business Confidence Index improved significantly, rising from 138.2 in the January-March quarter to 149.8 in the June quarter, reflecting enhanced business sentiment. The review notes that the FY25 budget focuses on capital expenditure and maintaining fiscal discipline, projecting a fiscal deficit of 4.9% of GDP, down from 5.1% in the interim budget. The nominal GDP growth projection remains at 10.5%.
Women-owned MSMEs constitute 39% of India's sector
At present, there are over 1.84 crore women-owned MSMEs in the country. The government has implemented several initiatives to boost women’s participation in MSMEs, including the 2018 amendment to the Public Procurement Policy. This policy requires central ministries and departments to procure at least 3% of their annual purchases from women entrepreneurs, aiming to support and benefit women-led businesses.
FACT OF THE DAY
E-Commerce Boom Drives Warehousing Demand
With the rise of online shopping, e-commerce is fueling significant growth in the warehousing industry. According to Colliers, industrial and warehousing demand in the top five cities saw a 17% year-on-year increase, with leasing activity reaching 13 million sq ft in H1 2024. Chennai leads with an 88% YoY demand spike, followed by Bengaluru at 21% and Delhi at 14%. Read more to explore this trend.
UPI and CBDCs lower remittance costs and boost inflows: RBI
The Reserve Bank of India (RBI) has noted that the global adoption of the Unified Payments Interface (UPI) and the development of Central Bank Digital Currencies (CBDCs) could help lower remittance costs, boost their volume, and increase inflows. A report by RBI highlights that a 1% decrease in the cost of remitting US$200 results in a 1.6% increase in remittances.
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HIGHLIGHT OF THE DAY
Government Identifies New Districts for Cultivation
To achieve self-sufficiency in pulses, the government has targeted 35 new districts for tur cultivation and 13 districts for urad, aiming to expand the area covered by these kharif pulses. High-yielding seed varieties will be distributed to enhance production. In 2023-24, India spent $3.74 billion on importing major pulses due to low domestic yields caused by erratic rainfall. Read more to learn about this initiative.
India’s coal quandary: Record production amidst regional shortages
India’s coal industry is experiencing a significant boost in production and export potential, with recent increases reaching nearly 1,000 million tonnes. However, severe coal shortages in northern regions underscore the need to balance immediate supply issues with long-term strategic goals, including diversification into renewable energy sources and improved energy efficiency.
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