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India’s Chief Economic Advisor (CEA), <keyword id="20690607" type="General" weightage="20" keywordseo="V-Anantha-Nageswaran" source="keywords">V Anantha Nageswaran</keyword>, remains optimistic about the nation’s economic prospects despite a slower-than-expected <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> in the second quarter of FY2024-25. Speaking at the Bharat @100 Summit hosted by Assocham, he said that the fundamental health of the economy remains robust, according to a report by aNI. Nageswaran highlighted several indicators demonstrating the economy’s resilience. “If you run through the checklist for the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword>, the health is pretty robust,” he noted, pointing to controlled levels of external debt as a share of GDP, declining non-performing assets in the banking system, and stable inflation trends. Although certain food items have caused inflationary spikes, their impact is limited within the overall consumer price index basket, he explained. The CEA praised the shift in fiscal expenditure priorities over the past seven years, with greater focus on capital investments rather than revenue spending. This reallocation, he suggested, has bolstered long-term economic stability and growth potential. India’s GDP growth for the July-September quarter was 5.4%, significantly below the Reserve Bank of India’s forecast of 7%. While this has sparked concerns among economists, Nageswaran urged against overreacting. Erratic monsoons and excessive rainfall disrupted economic activity in Q2, he explained, while global uncertainties and supply chain pressures further weighed on growth. Despite these challenges, he maintained confidence in the broader growth narrative, citing improvements in key economic metrics. For instance, India’s gross capital formation has risen from 27.3% of GDP in the second decade of the 2000s to 30.8% today. Private consumption remains steady, and exports—spanning both services and manufacturing—continue to perform well even amid challenging global conditions. Nageswaran also underscored India’s growing competitiveness in international trade. He noted that the nation’s total <keyword id="24325087" type="General" weightage="20" keywordseo="exports-as-a-percentage-of-GDP" source="keywords">exports as a percentage of GDP</keyword> now surpass China’s, showcasing its resilience and adaptability in a shifting global trade environment. However, he cautioned against reading too much into quarterly fluctuations, highlighting the impact of geopolitical developments such as trade restrictions from the US on critical minerals and rare earths, as well as policy shifts in China. These external factors, he suggested, are likely to persist and may continue influencing short-term economic trends. (with ANI inputs)

Indian economy is resilient despite Q2 challenges, says CEA Nageswaran

As the vibrant <keyword id="19896655" type="General" weightage="20" keywordseo="wedding-season" source="keywords">wedding season</keyword> kicks off in India soon, the <keyword id="19921618" type="General" weightage="20" keywordseo="Confederation-of-All-India-Traders" source="keywords" meta.keywordsubtype="org" meta.entityname="Confederation of All India Traders" meta.hostid="261" meta.entityid="Confederation of All India Traders">Confederation of All India Traders</keyword> (<keyword id="20143308" type="General" weightage="20" keywordseo="CAIT" source="keywords" meta.keywordsubtype="org" meta.entityname="CAIT" meta.hostid="261" meta.entityid="CAIT">CAIT</keyword>) has set an optimistic forecast, projecting a windfall for the nation’s economy. According to a recent CNBC report, CAIT predicts that this year, an estimated 48 lakh weddings are expected to take place in November and December, potentially generating a whopping ₹6 lakh crore in business. This surge reflects not just the volume of weddings but the wide-scale economic impact that accompanies such celebrations. Weddings in India are known for their grandeur, with celebrations often spanning several days and involving a number of services, from event planning and catering to jewellery purchases and attire. CAIT’s recent prediction, thus, underscores the vital role that the wedding season plays in the retail market. In this year’s cycle, the retail sector alone is poised to see a turnover of ₹5.9 lakh crore, highlighting the deep interconnectedness between cultural traditions and economic activity. In Delhi, which stands as one of the top locations for extravagant weddings, the expected impact is particularly significant. Approximately 4.5 lakh weddings are projected in the capital city, potentially contributing around ₹1.5 lakh crore to the local economy. This surge benefits a variety of sectors, including hospitality, fashion, gold and jewellery, and even technology, as digital services and e-invitations become more prevalent. The build-up to this wedding season has already shown signs of economic revival, particularly in sectors like gold and jewellery. Suvankar Sen, MD &amp; CEO of Senco Gold, noted a marked increase in wedding-related purchases during the recent Dhanteras festival. Speaking in an interview with CNBC TV-18, Sen highlighted that the August duty cut on gold played a significant role in spurring early buying behaviour. He pointed out that this policy move helped lower the cost of gold, enticing consumers to make significant purchases ahead of the peak wedding months. "We can see at least 40-50% of the consumers who are buying right now are related to weddings, and the 40-50% who are not related to weddings, are divided amongst consumers with a budget of ₹2-3 lakh buying some kind of jewellery as an annual buying during this auspicious time. Some consumers are buying working women's jewellery or lightweight for their daughters, something within ₹50,000 to ₹1 lakh kind of buying happening. ₹20,000-30,000 is a budget consumer at all levels, some kind of a pendant, ring or earring that everyone would like to buy during this auspicious time. So, this is how we are seeing the consumer," he added. This early momentum has translated into packed showrooms and increased consumer spending, signalling a robust start to wedding-related commerce. Retailers across India are now preparing for a flurry of activity, restocking inventory and expanding service offerings to meet the anticipated demand. From wedding attire and décor to luxury items like high-end electronics and custom-made invitations, the shopping lists are extensive, promising a lucrative time for businesses. While traditional sectors such as fashion, catering, and venue rentals will see a boom, new trends have also emerged, expanding the <keyword id="23787664" type="General" weightage="20" keywordseo="wedding-economy" source="keywords">wedding economy</keyword>. The demand for eco-friendly and sustainable wedding practices has grown, with couples seeking biodegradable décor and eco-conscious catering services.

Indian weddings expected to generate ₹6 lakh crore in two months, CAIT says

<ul><li><keyword id="19920097" type="General" weightage="20" keywordseo="Karwa-Chauth" source="keywords">Karwa Chauth</keyword> is set to add ₹22,000 crore worth of business to the <keyword id="19948184" type="General" weightage="20" keywordseo="Indian-economy" source="keywords">Indian economy</keyword>.</li><li>This year's spending is expected to surpass last year's ₹15,000 crore mark.</li><li>Karwa Chauth will be celebrated across India on Sunday.</li></ul>Deeply rooted in Indian culture and spirituality, the festival of Karwa Chauth has grown into a significant economic event, with an estimated ₹22,000 crore worth of business anticipated in markets nationwide. The traditional festival will be celebrated across India on Sunday, marking a day of fasting and prayer for the well-being and longevity of spouses. This year's spending is expected to surpass last year's ₹15,000 crore mark, reflecting a surge in enthusiasm and <keyword id="23410660" type="General" weightage="20" keywordseo="consumer-activity" source="keywords">consumer activity</keyword>. Over the past week, markets across the country have witnessed a lively atmosphere, with bustling crowds shopping for clothing, jewellery, cosmetics, gift items, and puja essentials in preparation for the occasion. Delhi, one of the central hubs for the festivities, is expected to contribute significantly to this economic boom, with sales projected to reach approximately ₹4,000 crore. The shopping spree spans a variety of items associated with Karwa Chauth, including jewellery, traditional clothing, makeup products, sarees, and religious items like Karwa pots, sieves, lamps, wicks, and prayer books. In addition, red glass bangles, anklets, toe rings, lockets, and intricately designed Karwa thalis are among the popular items being purchased. This year, silver Karwas have also been introduced to the market, and they are expected to be in high demand. Henna (mehendi) application, considered auspicious for the festival, has also seen a surge in popularity, with markets, temples, and public places filled with women lining up to get their hands decorated. In Delhi, Connaught Place's Hanuman Temple has become a prominent spot where thousands gather for mehendi, while beauty parlours and private mehendi sessions are booked solid. Henna artists find a valuable opportunity to earn a livelihood during this period. Karwa Chauth not only boosts retail activity but also sets the stage for the upcoming <keyword id="19896655" type="General" weightage="20" keywordseo="wedding-season" source="keywords">wedding season</keyword>, with many shoppers placing orders for <keyword id="20242079" type="General" weightage="20" keywordseo="gold-jewellery" source="keywords">gold jewellery</keyword>. The wedding season, commencing in November, traditionally sees a rise in bookings for bridal jewellery, and the festival serves as an early catalyst for these purchases. With inputs from ANI. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/best-credit-cards-for-online-shopping-in-india/articleshow/114354358.cms">Best credit cards for online shopping this festive season</a> <a href="https://www.businessinsider.in/tech/mobile/webstories/best-smartphones-under-25000-in-india-in-october-2024/slidelist/114339207.cms">Best smartphones under ₹25,000 in India in October 2024</a> <a href="https://www.businessinsider.in/stock-market/webstories/waaree-energies-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/114350114.cms">Waaree Energies IPO – Price band to risk factors, all you need to know</a>

Karwa Chauth festivities to boost economy by ₹22,000 crore

Foreign Institutional Investors (FIIs) have been rapidly exiting Indian markets, and this high-speed exodus does not look like it will stop anytime soon. In October 2024, FIIs withdrew Rs 1,14,445.89 crores from Indian markets. Yesterday, FIIs withdrew $770.67 million from the markets, with equity outflows of $440.86 million and debt outflows standing at $327.44 million across various categories. Per NSDL data, hybrid outflows amounted to $2.31 million. While this may sound dissuading at first, a recent SBI report underlined that FIIs still hold a massive $ 18.241 billion in Indian markets. So far, FY25 has seen FII inflows worth $ 8.924 billion. However, the situation may quickly turn alarming as well, given that FII holdings in Indian equities have already come down to a 12-year low. Says Anirudh Garg, Partner and Fund Manager at Invasset PMS, "The current valuation of Indian stocks, trading at around 24 times expected earnings, appears high compared to Chinese stocks, which are at approximately 10 times. Economic concerns, including weak corporate earnings and declining consumer demand, further exacerbate this situation. Additionally, renewed fears of inflation and potential monetary tightening by central banks have led FIIs to withdraw from the Indian market." In the meantime, DIIs (domestic institutional investors) are stepping in big time. During October 2024, DIIs infused Rs 1,07,254.68 crore in Indian markets. In November so far, DIIs have been keeping the fund momentum going, infusing Rs 12,265.74 crore in India, while FIIs have offloaded Rs 16,445.49 crore this month. But despite this strong uptick, SBI's recent report suggests that consumer confidence in India remains below 100, signaling muted positivity and optimism in the economy. While household consumption is gradually recovering, it grew at 4% last year, much below the 7% levels recorded pre-pandemic. <h2>FII share in <keyword id="20868945" type="General" weightage="20" keywordseo="NSE-listed-companies" source="keywords">NSE-listed companies</keyword> takes a dip, DII stake rise </h2>FIIs share in NSE-listed companies stood at 15.98% in October, with assets under their custody in the equity segment coming to Rs 71.08 lakh crore last month. In September, this stood at Rs 77.96 crore. Experts suggest that this is likely to continue for some time to come. Mutual funds, on the other hand, saw their share in NSE-listed companies hit a record high of 9.58%, as opposed to their 9.32% stake in September 2024. FIIs turned net sellers in the debt segment as well in October, dumping $771 million in Indian markets. This comes after 2 consecutive months of healthy inflows in this segment in August and September 2024, where the figures stood at $2,806 million and $2,295 million, respectively.

FII stake in Indian equities dips to a 12-year low

<ul class="summary-list"><li>Russia can avoid crisis for three to five years, the Center for Analysis and Strategies in Europe said.</li><li>Domestic demand has kept the country strong, becoming a key driver of growth, the think tank said.</li></ul>Russia's wartime economy could be in it for the long-haul — or at least longer than expected.A team of economists is unconvinced that Russia will tumble into economic collapse any time soon, as suggested by some analysts.Instead, Russia's economic capability "excludes almost any chance of a serious crisis cause by internal factors in at least three-to-five years perspective," three authors wrote in a <a target="_blank" href="https://case-center.org/wp-content/uploads/2024/11/case-241112-en_fin2_compressed.pdf">report</a> for the Center for Analysis and Strategies in Europe.The paper counters notions that a Russian crisis will come as soon as next year, an argument made by economists such as Yuriy Gorodnichenko. The UC Berkley analyst told Business Insider that Moscow's slowing energy trade and dollar shortage would <a target="_blank" href="https://www.businessinsider.com/russia-economy-collapse-recession-moscow-ukraine-war-us-dollar-energy-2024-7">cause the crisis</a>.Even observers within the country expect<a target="_blank" href="https://www.businessinsider.com/russia-economic-experts-forecast-bumpy-2025-for-country-inflation-putin-2024-11"> struggle in 2025</a>, including <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-stagflation-recession-inflation-gdp-growth-ukraine-war-2024-11">the specter of staglfation</a>.But though Moscow is guaranteed to face challenges at some point, the CASE authors cautioned not to translate hardships into proof of a near-term crisis.Instead, these three trends will keep Russia resilient, they said:<h3 id="e2e33bea-404e-4393-9ba3-00371b80bb8d">1. Don't underestimate domestic demand</h3>According to the report, Russia's domestic market has been an underrated factor behind the country's perseverance.After Moscow's invasion of Ukraine, local consumption has kept the economy afloat, with domestic demand overtaking exports as a leading growth driver."In the construction sector alone in 2023, up to 30 million tons of steel were consumed (the increase from the previous year amounted to 9 percent), while before the war, in 2021, just over 15 million tons were exported," CASE said.Moscow's war efforts boosted the purchasing power of millions, as the need for soldiers lifted wages across the country. With more manpower needed at the front-lined, a rising <a target="_blank" href="https://www.businessinsider.com/russia-economy-growth-recession-labor-worker-shortage-inflation-sanctions-west-2024-9">labor shortage</a> at home furthered the wage trend.Lower-income Russians benefited the most, as recruited soldiers have largely stemmed from economically-depressed regions. In turn, these households spent heavily on domestically-products essentials.Meanwhile, wealthier households have benefited from Russia's high interest rates, which have boosted investment incomes, the report said."As a result, in 2022–2024, federal budget revenues from domestic sources were growing faster than oil and gas proceeds, whose share has declined from 40–45 percent of overall revenues in 2014–2019 to 30–35 percent in 2023–2024," it said.Demand is also not going away if the war does end soon, the CASE analysts said. On one hand, it shouldn't be assumed that defense spending will ease once peace returns, given that the Kremlin has indicated plans to keep defense industry production running at elevated levels.Secondly, returning soldiers will require care, and the subsidy programs that crop up should keep aggregate demand afloat.<h3 id="7977f137-74bc-4736-a4f9-c8bbde4a0eaa">2. Sustainable war spending</h3>Some have forecast an <a target="_blank" href="https://www.businessinsider.com/russia-economy-ukraine-war-moscow-military-spending-currency-inflation-budget-2024-9">immediate recession</a> if Russia's war in Ukraine ever ends, arguing that the Kremlin's massive war budget is responsible for the economy's continued survival.But Moscow's swelling war expenditures aren't unsustainable, CASE said.Though defense and national security spending will now account for <a target="_blank" href="https://www.businessinsider.com/russia-economy-outlook-defense-budget-spending-ukraine-war-putin-sanctions-2024-10">40% of all federal expenditures</a>, the report noted that the Kremlin has financing options.For instance, Moscow has a "huge space" in domestic borrowing, given that Russia's government's 18.1% debt-to-GDP isn't significant by modern standards.At the same time, the government has steadily increased tax burdens on both individuals and corporations. Next year, a long-standing flat income tax rate is set to be replaced by a progressive tax scale.Nominal business tax rates face an annual increase, equal to about 1 percentage point of GDP between 2023 and 2025.<h3 id="51c2f739-8912-4254-ba4d-5b049839921d">3. Inflation and labor concerns are non-issues</h3>CASE acknowledged that more spending and higher wages have created an fueled inflation, but said it shouldn't pose a severe threat.As price growth <a target="_blank" href="https://tass.com/economy/1871947">reached 8.54% in October,</a> that's good news for Moscow, as single-digit inflation won't trigger a slowdown. Instead, it will most likely be treated as a "new normal."Russia can also expect labor relief over time. Though the country was estimated to be missing as many as <a target="_blank" href="https://www.businessinsider.com/russia-lacks-workers-ukraine-war-labor-crisis-worker-shortage-2023-12">five million workers in 2023</a>, cutting down on excess employment among corporations could free up 2 million workers, CASE estimated.The report also cited discussions to cut down on easy access to higher education, and potentially make technical colleges a requirement. Changes to migration policy that would bring in more labor are also being pursued.

3 reasons why Russia's economy can survive without crisis for up to 5 more years, think-tank economists say

<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<keyword id="20207838" type="General" weightage="20" keywordseo="dsp-mutual-fund" source="keywords">DSP Mutual Fund</keyword>'s September 2024 Netra report credits <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s strong economic recovery to increased fiscal expenditure. The report, which tracks current economic trends and market insights through various charts, emphasizes the need for the private corporate sector and households to play a larger role in sustaining the ongoing growth momentum. Netra also pointed out an unsettling calm in the markets, with the Nifty 50 TRI index maintaining an impressive 53-month streak without a 5% decline and 13 years without a drop greater than 10%. Sahil Kapoor, Head of Products and Market Strategist, DSP Mutual Fund, said, "The calm in the markets, marked by an unnerving lack of volatility, is a double-edged sword. While it provides a sense of stability, it also masks underlying risks that could surface unexpectedly, catching investors off guard. To ensure a sustainable recovery, there is a need for the private sector and households to take the lead, transforming fiscal stimulus into lasting economic growth." However, the report notes a shift in market dynamics, with the momentum factor, which has outperformed since the COVID-19 bottom, beginning to lose its dominance. At the same time, the quality factor, which had underperformed over the last four years, is now seeing a resurgence, potentially indicating a change in market leadership that could favour quality-orientated funds, both active and passive. The report highlights the critical role government spending has played in the recovery, with a focus on capital investments crucial for future growth. However, contributions from the private corporate sector and households have lagged. It also draws attention to a slowdown in India's per capita consumption, approaching lows seen in previous cycles. Given that consumption accounts for around 60% of GDP, it is vital that this sector grows at a rate exceeding GDP growth to stimulate private capital expenditure. India's <keyword id="487578" type="General" weightage="20" keywordseo="tax-collections" source="Orion">tax collections</keyword> have demonstrated robust growth, with gross tax revenue showing a five-year compound annual growth rate (CAGR) of 14 %. This growth, largely driven by <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, indicates a rising dependency on capital gains and stock market performance, introducing new vulnerabilities to the economy. The banking and financial services sector (<keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword>) has emerged as a key driver of market earnings, recording a 12 % increase in profit after tax (PAT) growth, significantly outpacing the 4.6 % growth observed in non-BFSI Nifty 50 companies. This disparity underscores the sector's importance in India's economic story and highlights promising investment opportunities.

India's strong economic recovery is led by fiscal expenditure: DSP MF

<ul class="summary-list"><li>If Congress doesn't pass a stopgap bill by September 30, there will be a partial government shutdown.</li><li>East Coast and Gulf Coast ports will also shut down if a union contract isn't renegotiated by the same date.</li></ul>September 30 could be a consequential day for the US economy if two <a target="_blank" class="" href="https://www.businessinsider.com/us-government-shutdown-looms-ahead-harris-trump-presidential-election-2024-9">major negotiations</a> don't get hammered out in time.Congress must pass a stopgap spending bill by the last day of this month to avoid a partial government shutdown. September 30 is also the deadline for the <a target="_blank" class="" href="https://www.businessinsider.com/port-la-dock-workers-longshoremen-make-100k-salary-overtime-2021-9">International Longshoremen's Association</a> and several East Coast and Gulf Coast ports to strike a contract.If a government shutdown happens and/or a strike is not averted, substantial chunks of the <a target="_blank" class="" href="https://www.businessinsider.com/economy-jobs-report-sentiment-consumers-elections-recession-inflation-mortgage-rates-2024-9">US economy</a> could impacted a little more than a month before the 2024 presidential election.Of course, there's still time for members of Congress to negotiate a stopgap spending bill. On Wednesday, September 18, the House of Representatives rejected a bill brought by GOP House Speaker Mike Johnson that would have funded the government for another six months. On Thursday, Johnson and other GOP leaders signaled that they were interested in keeping the government open.There's also time for the International Longshoremen's Association to hash out a contract with the United States Maritime Alliance — though, as of Wednesday, there had been no negotiations thus far, nor are any on the books, The Wall Street Journal <a target="_blank" class="" href="https://www.wsj.com/articles/u-s-importers-are-pulling-in-goods-early-as-possible-port-strike-draws-closer-fff1930b">reported</a> this week.The two potential crises are unrelated beyond sharing an ominous deadline. Here's what's happening with each.<h2 id="83f582ee-541a-4bfa-871e-733af4d870b8">A government shutdown</h2>The rejection of <a target="_blank" class="" href="https://www.businessinsider.com/mike-johnson-trump-rally-shooting-political-rhetoric-election-2024-7">Johnson's</a> plan on Wednesday ratcheted up tensions in Congress as the September 30 deadline draws ever nearer.The 220-202 vote saw fourteen Republicans join with Democrats to block the bill, which is opposed by both the White House and Democrats in the Senate.While the bill had been expected to fail for days, former President <a target="_blank" class="" href="https://www.businessinsider.com/immigration-border-security-biden-trump-2024-election">Donald Trump</a> likely didn't help Johnson's cause by pushing Republicans to include the entirety of a voting registration bill that requires proof of citizenship to vote in national elections or move forward with a shutdown.As Johnson is now forced to work across the aisle, Democrats will likely propose a three-month continuing resolution, The Washington Post <a target="_blank" class="" href="https://www.washingtonpost.com/business/2024/09/18/house-bill-government-shutdown-funding/">reported</a>. On Thursday, The Wall Street Journal reported that GOP leaders were in discussions over a bill that would keep the government open until mid-December.The fallout of a pre-presidential election government shutdown would be bad for both parties, but Senate Minority Leader <a target="_blank" class="" href="https://www.businessinsider.com/mitch-mcconnell-trump-relationship-now-endorsement-senate-gop-2024-6">Mitch McConnell</a> told reporters on Wednesday that he thinks Republicans would bear the brunt of the blame.Should Congress fail to pass a bill by September 30, the government would be partially<a target="_blank" class="" href="https://www.businessinsider.com/who-is-affected-by-government-shutdown-parks-social-security-tsa-2023-9"> shut down</a> on October 1, meaning federal agencies that were not funded would discontinue all non-essential work until new funding legislation is passed and signed into law.During a shutdown, nonessential government workers are furloughed, social services programs like Social Security, Medicare, and veteran's benefits may experience disruptions, and national parks close to the public.The 2018-2019 shutdown that lasted 35 days reduced GDP by $11 billion, according to an <a target="_blank" href="https://www.cbo.gov/publication/54937">estimate</a> from the Congressional Budget Office.The previous three shutdowns, which occurred in 2013, 2018, and again in 2018-2019, cost taxpayers nearly $4 billion, <a target="_blank" class="" href="https://www.appropriations.senate.gov/news/majority/senator-murray-details-harms-of-a-needless-and-costly-shutdown-as-she-pushes-to-get-final-funding-bills-across-finish-line#:~:text=Shutdowns%20cost%20taxpayers.&amp;text=The%20last%20three%20shutdowns%20cost,late%20fees%20on%20interest%20payments.">according</a> to the Senate Appropriations Committee.<h2 id="82e4510d-0e5a-4c3f-a3b2-c6aad708ad11">A shutdown of the docks</h2>Meanwhile, the likelihood that 45,000 dockworkers at ports spanning Maine to Texas grows likelier with each day.The dockworkers' contract expires at the end of this month, and the International Longshoremen's Association has said its members will strike if a deal is not met.The union is asking for a 77% wage increase over six years, The Journal reported.The looming economic threat is prompting US importers to get a jump-start on <a target="_blank" class="" href="https://www.businessinsider.com/supply-chain-crisis-holiday-products-arriving-late-what-happens-2021-12">holiday shipping</a>, with millions of dollars worth of items being rushed to try to avoid the possible walkout, according to the outlet.A strike would likely lead to mass cargo diversions to West Coast ports, which could clog up gateways, per The Journal.Should these high-traffic ports cease operations ahead of the peak holiday season, the economic consequences for retailers and consumers could be dire.A walkout could result in mass delays, increased shipping costs, and potential shortages, all of which could affect the broader economy, according to the Retail Industry Leaders Association.Some analysts have predicted that every day of a strike would require five days to deal with the backlog, <a target="_blank" class="" href="https://www.rila.org/blog/2024/09/looming-port-strike-what-means-us-economy">according</a> to the industry group.The government could step in to help the two sides reach a deal, though the Longshoremen have said they don't want government intervention. President Joe Biden could also "request a court order for an 80-day cooling-off period under the Taft-Hartley Act," according to RILA. This would pause the strike while negotiations continued.

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