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A day before the official release of India's Gross Domestic Product (<keyword id="35050" type="General" weightage="20" keywordseo="GDP" source="Orion">GDP</keyword>) figures for <keyword id="21593310" type="General" weightage="20" keywordseo="Q1-FY25" source="keywords">Q1 FY25</keyword>, a report by <keyword id="20548750" type="General" weightage="20" keywordseo="Anand-Rathi" source="keywords" meta.keywordsubtype="org" meta.entityname="Anand Rathi" meta.hostid="261" meta.entityid="Anand Rathi">Anand Rathi</keyword> research estimates the GDP to grow by 7 per cent, primarily driven by the robust performance of the services sector. The financial advisory firm also maintains its full-year <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> projection at 7 per cent, though it warns of potential downside risks. Utilities GVA is expected to rise by 11.5 per cent, while the construction sector has slowed due to election-related disruptions and the impact of heat. The mining sector remains strong, supported by increased coal production. The services sector is expected to be the primary driver of GDP growth in Q1 FY25. Despite reduced <keyword id="20155204" type="General" weightage="20" keywordseo="government-spending" source="keywords">government spending</keyword> ahead of the elections, which is likely to dampen growth in some service sectors, financial, real estate, and professional services are expected to have performed well. This performance is attributed to strong market activity and credit growth. However, the trade and transport sectors present a mixed picture, with some indicators showing improvement while others remain moderate. Overall, Services Gross Value Added (GVA) is expected to grow by 8.2 per cent in Q1 FY25. As per the report, Investment was a key growth driver in FY24, fuelled by government infrastructure projects and a real estate upswing. However, the momentum appears to have slowed in Q1 FY25 due to pre-election restrictions. Despite this, the report predicts a significant rise in government capital expenditure in the coming months, supported by greater budget allocations. The report highlights the changing dynamics of private consumption in India. FY24 saw weak consumption, especially in rural areas, with final consumption expenditure growing by just 3.8 per cent. However, as FY25 begins, there are signs of a rural revival. Indicators such as increased two-wheeler sales and improving Fast-Moving Consumer Goods (FMCG) volume growth signal a rebound in rural demand. In contrast, urban demand continues to show signs of sluggishness. The muted sales of passenger vehicles, weaker retail credit transfers, and flat Goods and Services Tax (GST) collections underscore this trend. While consumption is not expected to see a significant rise in Q1 FY25, the outlook for the remainder of the year appears positive. This optimism is bolstered by anticipated higher agricultural output and sharper government focus on rural areas. The agriculture sector is expected to post a subdued growth of 2.1 per cent in Q1 FY25, affected by scorching heat and uneven rainfall last year, which led to lower reservoir levels and hindered farming activities. However, the outlook is more promising for the remainder of the fiscal year, with better rains and improved sowing conditions expected to boost agricultural output Additionally, a rebound in stamp duty collections suggests buoyant real estate sales. Private capital expenditure, which was previously subdued, is expected to expand in FY25, driven by rising capacity utilisation and strong order books. The industrial sector, which grew by 9.5 per cent in FY24, is expected to see a shift in growth drivers in Q1 FY25. The focus is now moving towards utilities and mining, with manufacturing growth slowing. While government infrastructure projects and private capital expenditure will continue to support industrial growth, the global growth slowdown poses potential risks.

Anand Rathi anticipates Q1 FY25 GDP growth at 7%, a little lower than RBI's estimate of 7.1%

July is abuzz with news of the upcoming union budget, which Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> will present on July 23, 2024. But you couldn't care less, because you’ve already decided that you’ll tune it all out, as soon as our beloved Nirmala Tai starts her budget presentations in the parliament. We get it, having spent less than three decades on this planet, we GenZers have already had a tough time understanding the complexities of the modern world affecting our daily life. When it comes to our national finances, we just can’t seem to make any sense of the words spoken, and the general vibe of complicated terms like <keyword id="19942084" type="General" weightage="20" keywordseo="Fiscal-Deficit" source="keywords">fiscal deficit</keyword> and <keyword id="20018917" type="General" weightage="20" keywordseo="Capital-Expenditure" source="keywords">capital expenditure</keyword> is extremely off-putting! So, why bother? Don’t worry, we have got you covered. As we step into an unforgiving adult world, it's time to tune in, as the Union Budget often has direct implications on your personal finances. To help you start, here’s your very own budget glossary, which will let you decode all budget-related mumbo-jumbo, the <keyword id="20246469" type="General" weightage="20" keywordseo="GenZ" source="keywords">GenZ</keyword> way. A: Annual Financial Statement Think of this as a simple breakdown of how much money the government has received and spent over three time periods — the current year, the previous year, and the budget (upcoming) year. This is required under Article 112 of the Indian Constitution. It has three parts: <ul><li>The consolidated fund of India, consisting of revenue received by the government as direct and indirect taxes, and loans</li><li>Contingency fund of India for emergencies, or disaster management</li><li>Public Account of India — our money that the government receives under various schemes like PPF, small savings and more </li></ul>B: <keyword id="20313429" type="General" weightage="20" keywordseo="Budget-Estimates" source="keywords">Budget Estimates</keyword> Say you set aside Rs 25,000 this month from your salary, to buy an uber-cool smartwatch. But you find a sweet steal deal on Amazon and manage to grab it for just Rs 20,000. The Rs 25,000 you set aside from your monthly budget was an estimate. In the same way, the government sets aside a specific sum for every project or scheme based on its estimates, but in the end, the actual expenses may vary. C: Capital Expenditure See the government allocating funds left, right and centre for building highways, improving rail connectivity, or developing other infrastructures? That's capital expenditure, or capex. The idea of undertaking capex is to build something for the long term, something which keeps contributing to the economy’s growth, long after its creation. D: Divestments Divesting means to sell off and let go of one’s stakeholding or ownership in a company or enterprise. The government generally divests its shares in various public undertakings to raise funds. Remember the much-touted IPO of Life Insurance Corporation of India (LIC) LIC’s IPO in May 2022? That was the government divesting 3.5% of its share in the insurance behemoth. E: Economic Survey This is a snapshot (and a pretty long one) of all the major economic developments that have taken place in the country during a particular financial year. It is usually released a day before the full budget, highlighting the performance of various government schemes, trends seen in various sectors of the economy, the policy initiatives taken by the government, and where the economy is going in the near future. F: Fiscal Deficit As daunting as it sounds, what if I tell you that most of us are perennially in a state of fiscal deficit? Surprised? It's simply when your spending exceeds your earnings. So, it gives you an estimate of how much you need to borrow, to tide over. Turns out, the government isn't faring great either, given that its fiscal deficit, or the difference between its revenue and expenditure currently stands at a staggering Rs 16,85,494 crores, or about 5.1% of India’s <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword>. G: GDP Gross Domestic Product is the collective monetary value of all the goods produced and services rendered in the country, during a particular period. In other words, it is the combined total of the economic output that is generated by 141.72 crore Indians like us, expressed monetarily. As of 2024, India’s GDP stood at $3.9 trillion. GDP is a measure of how healthy and strong an economy is. Some of the world’s biggest economies, like China and the US, have a GDP of $18.5 trillion and $28.7 trillion, respectively. G: <keyword id="20411624" type="General" weightage="20" keywordseo="Gender-Budgeting" source="keywords">Gender budgeting</keyword> When achieving gender equality, and addressing challenges women face by way of allocating resources and formulating policies accordingly becomes key to preparing a budget, it's known as gender-based budgeting. Such a budget ensures that distribution of public resources between men and women is not heavily skewed towards the former. In 2023-24, India’s gender budget swelled 4.3% to Rs 2.23 trillion, which is about 4.9% of the overall budget. H: <keyword id="21458145" type="General" weightage="20" keywordseo="Household-Income" source="keywords">Household Income</keyword> The total money earned by everyone in your home makes for your household income. So, if you are a family of 4, where your younger sister is studying, and you, along with your parents earn a total of say Rs 25,00,000 per annum, that is your household income. As of 2022-23, India’s average household income stood at Rs 3.6 lakh/annum. O: Outcome of Budget This is a statement of the outcomes achieved by various government departments with the budget allocated to them last year. It answers questions like was the money spent on purposes it was sanctioned for? What was the output achieved? Think of this as a report card, detailing your progress, or money spent during the year, and is indicative of what more needs to be done to achieve the desired results. R: Revised estimates Say are saving up Rs 70,000 for your buying the latest iPhone. But a few months down, you realize that the price point has changed as the release date approaches, and it is likely to cost about Rs 85,000 now. You see, your initial estimate was Rs 70,000, but then, you revised your estimated requirement to Rs 85,000. The government works no differently. 6-months after the budget presentation, the government assesses if the money granted to scheme A is sufficient, or does it need more funds. Are there any other schemes that need more fund allocation? The new, revised estimates then become the benchmark of functioning, against which actual expenditures are compared. S: Subsidy This is a sum that the government gives to an industry or business, with the objective to keep its prices for the general public low. The government pitches in to pay a part of production costs, so that the public does not end up bearing the entire burden of the cost. Remember the recently discontinued FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy on electric vehicles (EV) schemes, which boosted EV adoption amongst Indians. Imagine your elder brother or sister funds 40% of your much awaited Goa trip, without wanting anything in return, for the simple purpose of you having fun! That's them subsidizing your travel! V: Vote on Account Remember Nirmala Tai presented an interim budget this year in February, given that elections were due in May? In an election year, the incumbent government does not present a full fledged budget, because who knows if they’ll be voted back to power or not? So, to tide over the next few months before a new government is brought back to power, the government seeks vote on account, which is basically permission or grant needed to fund expenditures for the next few months. Z: Zero-based budgeting The term refers to a budgeting method in which all expenses must be justified for each new period, starting from a "zero base." Think of it like starting with a blank piece of paper every time you make a plan for how to spend your money. Instead of just changing what you spent last year, you think carefully about every rupee you need and why you need it. In 1986, the Indian government implemented ZBB as a system for determining the Expenditure Budget, making it compulsory for all ministries. However, implementation and application of this approach have remained inconsistent in the later years. So, it's time to listen to Tai with rapt attention, and flaunt your newfound budget dictionary to those still afraid of endless budget jargons!

Budget A-Z, for the GenZ: A fun and handy guide for major terms around upcoming Union Budget

In a rather dampened <keyword id="19915531" type="General" weightage="20" keywordseo="forecast" source="keywords">forecast</keyword> for the Indian economy, <keyword id="19908266" type="General" weightage="20" keywordseo="ICRA" source="keywords" meta.keywordsubtype="org" meta.entityname="ICRA" meta.hostid="261" meta.entityid="ICRA">ICRA</keyword> has forecast a sharp <keyword id="20637625" type="General" weightage="20" keywordseo="slowdown" source="keywords">slowdown</keyword> in India's <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword>. The credit rating agency has projected a year-on-year expansion of 6.0% in <keyword id="22106354" type="General" weightage="20" keywordseo="Q1-FY2025" source="keywords">Q1 FY2025</keyword> — the lowest in the last six quarters. In Q4 FY2024, India recorded an impressive 7.8%. The Reserve Bank of India had expected the growth momentum to continue this financial year as well. Earlier this month, the RBI governor had projected a 7.1% growth in Q1, while the growth rate for the entire financial year FY2024-25 was projected to be at 7.2%. The central bank had attributed this potential robust growth to improved agricultural activity, sustained buoyancy in services activity, healthy balance sheets of banks and corporates, thrust on capex by the government, visible signs of pick up in private investment, and improving prospects of global trade. However, RBI’s growth projections for this financial year were slightly moderated due to lower-than-anticipated corporate profitability, general government expenditure, and core industries output. As per ICRA, the sharp drop in GDP growth is primarily due to parliamentary elections and a contraction in government capital expenditure weakening urban consumer confidence. Another main cause could be the weakening urban consumer confidence, which reported a surprising downtick in the May and July 2024 rounds of the Central Bank’s Consumer Confidence Survey. “The lingering impact of last year’s unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment. Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors. The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand,” said Aditi Nayar, Chief Economist at ICRA. Despite the Q1 slowdown, ICRA expects economic activity to pick up in the latter half of FY2025, projecting an overall GDP growth of 6.8% for the full year, with a potential to exceed 7% in the second half. The agency expects decelerated growth in Gross Value Added (GVA) as well, easing to 5.7% in Q1 FY2025 from 6.3% in the previous quarter. This slowdown is primarily attributed to a decline in industrial growth, which is predicted to moderate to 6.4% from 8.4%, along with slight reductions in the services sector's growth and a modest improvement in agricultural GVA. The difference between GDP and GVA growth is expected to narrow to around 30 basis points (bps) in Q1 FY2025, down from 148 bps in the previous quarter, due to lower growth in net indirect taxes amid a rise in government subsidies. ICRA's analysis indicates that industrial GVA growth is likely to moderate in Q1 FY2025, with a slowdown in manufacturing and construction offset by growth in electricity, mining, and quarrying. Additionally, a contraction in government and state capital expenditure, along with a significant drop in new project announcements, has contributed to the overall slowdown. Manufacturing profit margins have also been under pressure due to rising global commodity prices and narrowing deflation in input costs, which, combined with slower growth in manufacturing output, suggests a deceleration in manufacturing GVA growth. In the agricultural sector, GVA growth is projected to be modest at 1.0% in Q1 FY2025, amidst declining output from most rabi and summer crops and a deficient rainfall in June 2024. With growing concerns around inflation and unemployment in India and across the world, the latest forecast could further fuel the fears around recession and slowdown in major economies. However, a much clearer picture will emerge with the actual quarterly estimates of GDP for Q1 from the National Statistical Office (NSO) next week. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/digital-initiatives-to-triple-indian-retail-borrowing-to-usd-2-5-trillion-by-2030-sp-global/articleshow/112263945.cms" data-type="tilCustomLink" target="_blank">Digital initiatives to triple Indian retail borrowing to USD 2.5 trillion by 2030: S&amp;P Global</a>

ICRA forecasts slowdown in India's economy: GDP growth expected to hit six-quarter low in Q1 FY2025

The <keyword id="22902068" type="General" weightage="100" keywordseo="health-insurance-sector" source="keywords">health insurance sector</keyword> may face challenges in the coming months, due to <keyword id="20617555" type="General" weightage="20" keywordseo="rising-claims" source="keywords">rising claims</keyword> and increased competition, particularly in the retail sector, highlighted a report by <keyword id="19905137" type="General" weightage="20" keywordseo="Jefferies" source="keywords" meta.keywordsubtype="org" meta.entityname="Jefferies" meta.hostid="153" meta.entityid="Jefferies">Jefferies</keyword>. "Health (approx. 35% of mix) can see pressure in its retail segment from rising claims frequency and elevated competition" the report stated. The report indicated that <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="22461357" type="General" weightage="20" keywordseo="non-life-insurance" source="keywords">non-life insurance</keyword> sector is experiencing significant shifts, the health insurance segment may face challenges as healthcare costs continue to rise and more consumers claim their insurance, and insurers are grappling with increased payouts. This trend could squeeze margins and put pressure on insurers to find ways to manage costs while remaining competitive in the market. However, for the <keyword id="20224622" type="General" weightage="20" keywordseo="motor-insurance" source="keywords">motor insurance</keyword> segment, the report draws a promising picture and added that it is entering a promising multi-year upcycle. This positive momentum is expected to benefit large private insurers of the motor segment, who are well-positioned to capitalize on these trends. "Initiate on Non-Life Insurers Large private insurers are set to gain from multi-year upcycle in motor (approx. 35% of premium mix) led by <keyword id="21232881" type="General" weightage="20" keywordseo="premiumization" source="keywords">premiumization</keyword> of underlying auto mix and moderating competitive intensity" the report mentioned. The report also added that the motor insurance segment in India is estimated to grow at a compound annual growth rate (CAGR) of 14% over the financial years 2024 to 2027. The key driver behind this growth is the ongoing shift in the automobile market towards higher-value vehicles. Over the past three years, the average selling price (ASP) of passenger vehicles (PVs) has increased by 41%, reflecting a move towards premium segments. This trend is expected to continue, benefiting motor insurance renewals, which account for 60-70% of the motor insurance premium mix. "Motor segment amidst a multi-year upcycle (est. 14% CAGR over FY24-27E) as renewals (60-70% of premium mix) will continue to benefit from the underlying change in auto mix towards premium high-value segments" the report added. Despite these challenges, the report mentioned that the broader non-life insurance market in India remains significantly underpenetrated, with insurance premiums representing only about 1% of the country's <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword>. This is relatively low compared to global peers, where non-life insurance to GDP ratios range between 2% and 4%. However, the Indian non-life insurance market has shown steady growth, with gross premiums expanding at a CAGR of 12% over the past five years, reaching Rs 2.8 trillion (approximately $35 billion). Notably, the private sector has outpaced the overall market. "India remains an under-penetrated market with non-life insurance to GDP at approx. 1% (vs 2-4% for global peers). Gross premiums have expanded at 12% CAGR over the last 5 years to Rs 2.8tn (approx. $35bn) with the private sector growing faster at 15% CAGR and improving its market share to 68%(from 57%)" said Jefferies in the report. Despite these challenges, the overall insurance market in India remains underpenetrated, offering significant long-term growth potential for insurers who can navigate these dynamics effectively.

Rising claims pose challenge for health insurance sector in India, says Jefferies

<ul><li>The Indian economy is expected to grow at over 7% rate in upcoming years</li><li>Fiscal deficit down to 6.4% of <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword> in FY24</li><li>Current Account Deficit (CAD) down to 0.7% of GDP </li></ul>With the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024 to be presented tomorrow, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> is presenting the <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> in the parliament today. Think of the <keyword id="6354872" type="General" weightage="20" keywordseo="economic-survey" source="Orion">Economic Survey</keyword> as a report card of the country's economic performance over the past year, along with inputs and outlook for the coming fiscal year. Here are some crucial highlights from the Economic Survey 2023-24: <h2>Macro-economic indicators</h2>Per the World Economic Outlook in April, the <keyword id="19948494" type="General" weightage="20" keywordseo="global-economic-growth" source="keywords">global economic growth</keyword> was pegged at 3.2% in 2023. In contrast, <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s real GDP grew by 8.2% in FY24, staying above the 8% mark for 3 out of 4 quarters in FY24. Gross Fixed Capital Formation, or investments in long-term, value-generating fixed assets increased by 9% real terms in 2023-24. The government trimmed down fiscal deficit trimmed down from 6.4% of GDP in FY23 to 5.6% of GDP in FY24.The current account deficit, which indicates that the country is a net importer rather than being an exporter, came down to 0.7% of GDP in FY24, as opposed to 2% of GDP in FY23. While retail inflation averaged at 6.7% in FY23, it dropped down to 5.4% in FY24 During FY24, primary markets saw capital formation, or facilitated raising funds worth Rs 10.9 lakh crore, which makes up for around 29% of the gross fixed capital formation. India's market capitalization to GDP ratio is the fifth largest in the world. <h2>Inflationary Trends </h2>Core inflation eased down to 9-year lows, while core goods inflation came down to a 4-year low. However, food inflation continued to stay high, inching up to 7.5% in FY24, as opposed to 6.6% in FY23. This was largely because of adverse weather conditions, which caused a spike in onion and tomato prices and impacted kharif crop production. Going ahead, RBI's short-term outlook remains positive. Assuming a normal monsoon and no extraordinary policy or geopolitical shocks, the inflation is estimated to drop to 4.5% in FY25, and further down to 4.1% in FY26. These are in line with IMF's inflation forecasts, which stand at 4.6% for 2024 and 4.2% for 2025. <h2>Export-Import trends</h2>India's service exports jumped by 4.9% to $341.1 billion in FY24, driven mainly by IT and software services. Apart from being the top remittance recipient globally, with remittances worth $120 billion in 2023, the country also witnessed investment inflows from foreign investors. As of March 2024, India's forex reserves were sufficient to cover over 10 months of projected imports in FY25, and about 98% of all its external debt. The country's external debt to GDP ratio has been largely consistent over the years, standing at 18.7% of the GDP as of March 2024. <h2>Key growth areas to look out for in FY25 </h2>Essential to adopt bottom-up reform approach, with special short to medium term emphasis on structural changes, job and skill creation, addressing challenges faced by MSMEs, managing India's transition towards a green, clean economy, deepening the country's nascent bond market and laying greater stress on tackling quality of health, especially amongst young Indians. Deliberate focus needed on boosting private investment, expanding India's MSMEs, tapping into the potential of India's agriculture sector, manage India's green transition, urgently bridge the employment-education gap and build capacity of states to sustain and complement India's growth. In the medium term, the country's economy is expected to grow at a rate of over 7%.

Economic Survey 2024: GDP grew by 8.2%, to sustain 7%+ growth momentum, fiscal deficit down to 6.4% of GDP

India's economy is expected to grow at 7-7.2 per cent in the current fiscal year driven by robust economic fundamentals and continuity in domestic policy reforms, <keyword id="20006170" type="General" weightage="100" keywordseo="Deloitte-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Deloitte India" meta.hostid="261" meta.entityid="Deloitte India">Deloitte India</keyword> said on Monday. The August update of <keyword id="19896400" type="General" weightage="20" keywordseo="deloitte" source="keywords">Deloitte</keyword>'s India Economic Outlook said several initiatives in the <keyword id="19908389" type="General" weightage="20" keywordseo="union-budget" source="keywords">Union Budget</keyword> 2024-25 toward improving agriculture productivity, creating jobs for the youth, and in manufacturing and addressing the challenge of access to finance for micro, small, and medium enterprises (MSMEs), would help improve supply-side demand, curb inflation, and prop up <keyword id="20139791" type="General" weightage="20" keywordseo="consumer-spending" source="keywords">consumer spending</keyword>, especially in rural areas. Deloitte India Economist Rumki Majumdar said, India will witness robust growth in the second half after a period of uncertainty in the first six months of the year. "Key contributing factors include the continuity in domestic policy reforms, reduced uncertainties in the US post-elections, and more synchronous global growth within a low inflation regime. "Additionally, improved global liquidity conditions, as central banks in the West ease their monetary policy stance, will enhance capital flows and drive higher investments, particularly in the private sector," Majumdar said. Observing that strong economic fundamentals would drive <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> between 7 per cent and 7.2 per cent in FY25, the Economic Outlook report said effectively addressing the urban-rural consumer spending gaps, inflation, and employment concerns can significantly enhance the affordability of aspirational rural consumers. "The much-desirable policy pivot was evident in the Union Budget presented last month. Reducing the urban and rural spending gap in the coming years will ensure sustained consumer demand from a larger consumer base," it added. Deloitte India's growth projection is at par with that of RBI, which projected FY'25 growth at 7.2 per cent. It is higher than Finance Ministry's Economic Survey which estimated GDP expansion between 6.5-7 per cent. The <keyword id="19948184" type="General" weightage="20" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> grew at 8.2 per cent in 2023-24 fiscal year. The report further said despite strong growth, private consumption spending has remained modest over the past five years. The pandemic, high global and domestic inflation, consequent tightening of financial conditions, and the effects of poor agriculture output on rural demand seem to have capped private consumption growth in India. But a Deloitte research showed that India is witnessing distinct and broad-based shifts in consumption patterns. There is a broad-based shift in the composition of consumption towards more non-food and discretionary items, reflecting changing lifestyles and preferences that are here to stay. According to the Household Consumption Expenditure Survey, spending on discretionary goods and services (including conveyance) has gone up both in rural and urban India, with the former quickly catching up in spending on discretionary durable goods (including automobiles, electric and electronic goods) with the latter in just one decade. "Demand for processed food has been among the highest in most states, suggesting a shift towards ready-to-eat options. Rapid urbanization, increasing women's participation in the workforce, and enhanced marketing and availability are driving these changing dietary habits," the report said. According to Deloitte research, if increasing income in states results in a relatively equitable distribution and higher rural spending, businesses can tap into a larger proportion of the state's population that resides in rural areas. This gives businesses access to a large consumer base and a sustainable consumer spending demand, as compared to states with a widening gap.

Indian economy likely to grow at 7-7.2 percent in FY25,Deloitte India says

Mumbai (Maharashtra) [India], August 8 (ANI): <keyword id="64190" type="General" weightage="100" keywordseo="RBI-Governor" source="Orion">RBI Governor</keyword> <keyword id="6359111" type="General" weightage="20" keywordseo="Shaktikanta-Das" source="Orion">Shaktikanta Das</keyword> says <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword> will moderate from July onwards as the monsoon has improved and <keyword id="489239" type="General" weightage="20" keywordseo="Global-food-prices" source="Orion">global food prices</keyword> have shown signs of easing in July. Das said, "Global food prices showed signs of easing in the month of July after registering an increase since March 2024." A degree of relief in food inflation is expected from the pickup in southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta Das. Das added, "Assuming a normal monsoon and taking into account the 4.9 per cent inflation print, Q1 CPI inflation for the current financial year (2024-25) is projected at 4.5 per cent, with q2 at 4.4 per cent, Q3 at 4.7 per cent and Q4 at 4.3 per cent. CPI inflation for the first quarter of next financial year (Q1 2025-26) is projected at 4.4 per cent." The inflation landscape reflects mixed signals, to which Das said, "<keyword id="21258540" type="General" weightage="20" keywordseo="headline-inflation" source="keywords">Headline inflation</keyword> eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." RBI Governor Shaktikanta Das, outlined the <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> with real <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> of 7.2 per cent for the fiscal year 2024-25 and headline inflation eased to 5.1 per cent in June, on Thursday. Das said, "Real GDP growth for 2024-25 is projected at 7.2 per cent with Q1 at 7.1 per cent, Q2 at 7.2 per cent, Q3 at 7.3 per cent and Q4 at 7.2 per cent. Real GDP growth for Q1 2025-26, this is something which we are giving for the first time, is projected at 7.2 per cent. The risks are evenly balanced." He added, "We have slightly moderated the <keyword id="387719" type="General" weightage="20" keywordseo="growth-projection" source="Orion">growth projection</keyword> for the first quarter of the current financial year in relation to the projection we gave in the previous MPC in June. This is primarily due to updated information on certain high-frequency indicators which show lower than anticipated corporate profitability, general government expenditure and core industries output." This forecast marks a slight moderation from previous estimates provided in the Monetary Policy Committee (MPC) meeting in June, attributed to recent updates on high-frequency indicators such as corporate profitability, general government expenditure, and core industries output. The inflation landscape reflects mixed signals, to which Das said, "Headline inflation eased up to 5.1 per cent in June 2024 due to higher than expected food inflation. Fuel remained in deflation for the 10th consecutive month. Core inflation moderated to a historic low in the months of May and June." Balancing robust growth projections with a nuanced understanding of inflation dynamics Governor Das stated, "Food inflation which has a weight of around 46 per cent in the CPI basket, contributed to more than 75 per cent of headline inflation in May and June. Vegetable prices increased sharply and contributed about 35 per cent to inflation in June. High inflation pressures persisted across other major food items also." Governor Das mentioned softening in core inflation continues to be broad-based with core services inflation touching a new low in the current CPI series during the month of May and June 2024. Das stated, "The high food price momentum likely to have continued in the month of July also. Large favourable base effects may however push headline inflation downwards in July. The Impact of the revision in milk prices mobile tariffs also needs to be carefully monitored." A degree of relief in food inflation is expected from the pickup in south west monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals continue to be above the norms, according to RBI Governor Shaktikanta das. Das anticipates some relief in food inflation due to the expected pickup in the southwest monsoon and healthy progress in Kharif sowing. Buffer stocks of cereals remain above the normative levels, contributing to a more stable food price environment. Global food prices, which have been on an upward trajectory since March 2024, showed signs of easing in July.

RBI Governor Shaktikanta Das projects 7.2% GDP growth for 2024-25, reports eased inflation to 5.1% in June

<ul><li>Manufacturing, mining and services sectors contributed to <keyword id="44910" type="General" weightage="20" keywordseo="gdp-growth" source="Orion">GDP growth</keyword> in Q2.</li><li>The GVA in the manufacturing sector showed a growth of 13.9% in the second quarter.</li><li>The output of eight key infrastructure sectors jumped 12.1% in October 2023. </li></ul>India's economy grew 7.6% in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors, the government data showed on Thursday. The gross domestic product (GDP) expanded by 6.2% in the July-September quarter of 2022-23. India remained the fastest-growing major economy, as China posted a 4.9% growth in July-September 2023. “The 7.6% GDP growth in the September quarter has far exceeded the RBI’s 6.5% estimate for the period, ensuring that India remains on the growth path despite multiple global headwinds arising from economic and geo-political uncertainties,” said Vivek Rathi, National Director Research, Knight Frank India. Manufacturing picks up pace, agriculture slows The gross value added (GVA) in the manufacturing sector showed a growth of 13.9% in the second quarter of the current fiscal compared to a contraction of 3.8% in the year-ago period. “Manufacturing and construction were the clear leaders with growth of 13.9% and 13% respectively. In the case of manufacturing, high profit growth contributed to the buoyancy while construction was up due to housing as well as government capex,” said Madan Sabnavis, chief economist at Bank of Baroda. As per the data, the output (GVA) in the 'mining and quarrying' accelerated to 10% in the second quarter against a contraction of 0.1% a year ago. Electricity, gas, water supply and other utility services' grew by 10.1% from 6.1%. “Double digit growth in the industry sector, especially in manufacturing and construction is suggesting that businesses ramped up production to meet the pent-up demand just before the festivals,” said Rumki Majumdar, Economist, Deloitte India. According to the <keyword id="7734679" type="General" weightage="50" keywordseo="national-statistical-office" source="Orion">National Statistical Office</keyword> (NSO) data, the agriculture sector GVA growth decelerated to 1.2% in the September 2023 quarter from 2.5% a year ago. This was expected due to seasonal effect, say economists. The construction sector recorded a growth of 13.3% year-on-year in the second quarter compared to 5.7%. The expansion in financial, real estate and professional services' GVA was 6%, down from 7.1% in the year-ago quarter. “As a derived demand, the upturn in the capex cycle and the strengthening domestic profile of consumers should prove to be strong drivers of India's real estate market. The continuation of the real estate upcycles, coupled with the increased focus on infrastructure development will support the sustained growth of the construction sector,” said Rathi. Meanwhile, the output of eight key infrastructure sectors jumped 12.1% in October 2023 against 0.7% expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data. The government's fiscal deficit at the end of October touched 45% of the full-year budget estimate, according to data released by the Controller General of Accounts (CGA) on Thursday. “Personal consumption growth lost momentum and grew only 3.1% YoY. However, it could be a possibility that consumers postponed their spending for the upcoming festive months and may have reallocated funds for investments. Higher consumer spending may get reflected in the October-December quarter,” said Majumdar. (With PTI inputs)

India's GDP grows 7.6% in September quarter, beats RBI estimates

New Delhi, India's economy grew 7.6 per cent in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors, the government data showed on Thursday. The gross domestic product (GDP) expanded by 6.2 per cent in the July-September quarter of 2022-23. India remained the fastest-growing major economy, as China posted a 4.9 per cent growth in July-September 2023. According to the National Statistical Office (NSO) data, the agriculture sector GVA (Gross Value Added) growth decelerated to 1.2 per cent in the September 2023 quarter from 2.5 per cent a year ago. The expansion in financial, real estate and professional services' GVA was 6 per cent, down from 7.1 per cent in the year-ago quarter. The GVA in the manufacturing sector showed a growth of 13.9 per cent in the second quarter of the current fiscal compared to a contraction of 3.8 per cent in the year-ago period. As per the data, the output (GVA) in the 'mining and quarrying' accelerated to 10 per cent in the second quarter against a contraction of 0.1 per cent a year ago. Electricity, gas, water supply and other utility services' grew by 10.1 per cent from 6.1 per cent. The construction sector recorded a growth of 13.3 per cent year-on-year in the second quarter compared to 5.7 per cent. The growth in gross domestic product (GDP) during the April-June quarter of 2023-24 remained unchanged at 7.8 per cent. "Real GDP or GDP at Constant (2011-12) Prices in Q2 2023-24 is estimated to attain a level of Rs 41.74 lakh crore, as against Rs 38.78 lakh crore in Q2 2022-23, showing a growth of 7.6 per cent as compared to 6.2 per cent in Q2 2022-23," the NSO said in a statement. Nominal GDP or GDP at current prices in Q2 2023-24 is estimated at Rs 71.66 lakh crore against Rs 65.67 lakh crore in Q2 2022-23, showing a growth of 9.1 per cent as compared to 17.2 per cent in Q2 2022-23, it added. It further said the GDP at constant (2011-12) prices in April-September 2023-24 (H1 2023-24) is estimated at Rs 82.11 lakh crore against Rs 76.22 lakh crore during the corresponding period of the previous year, showing a growth of 7.7 per cent in H1 2023-24 compared to 9.5 per cent in H1 2022-23, it said. GDP at current prices in H1 2023-24 is estimated at Rs 142.33 lakh crore compared to Rs 131.09 lakh crore during the corresponding period of the previous year, showing a growth of 8.6 per cent in H1 2023-24 against 22.2 per cent in H1 2022-23. Meanwhile, the output of eight key infrastructure sectors jumped 12.1 per cent in October 2023 against 0.7 per cent expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data. The government's fiscal deficit at the end of October touched 45 per cent of the full-year budget estimate, according to data released by the Controller General of Accounts (CGA) on Thursday.

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