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<ul class="summary-list"><li>The Indian economy has grown strongly under Narendra Modi, whose party is set to win another term.</li><li>India's success has caught the eye of figures including Elon Musk, Jamie Dimon, and Tim Cook.</li></ul>India's powerful economic growth and blossoming middle class under Narendra Modi have caught the eye of corporate titans like Elon Musk, Jamie Dimon, and Tim Cook.Modi is pretty much a shoo-in for a third term as prime minister after the national election now underway ends on June 1. But the work starts there, as he'll have to navigate thorny issues such as youth unemployment, income inequality, and reliance on sanctioned Russian oil.<h2>Fueling growth and shaking hands</h2>India's economy has more than doubled in size during Modi's decade in charge to more than $3.7 trillion last year.The International Monetary Fund (IMF) <a target="_blank" href="https://www.imf.org/en/Blogs/Articles/2024/04/29/asias-growth-and-inflation-outlook-improves-but-risks-remain">recently upgraded</a> its growth forecast for real Gross Domestic Product (GDP) to a robust 7.8% this year, 6.8% in 2025, and 6.5% in 2026.India has already overtaken Britain to become the world's fifth-largest economy. It's on track to leapfrog Japan and Germany into third spot behind the US and China by 2027.The country's flagship stock index has also tripled in value since Modi took office in May 2014, thanks to wealth gains and growing investment appetites.Moreover, <a target="_blank" href="https://sbi.co.in/documents/13958/36530824/270224-HCES_Feb24.pdf">one estimate</a> puts the percentage of the Indian population living on less than $2.15 a day at below 5%, down from 12% in 2011. However, the <a target="_blank" href="https://pip.worldbank.org/country-profiles/IND">World Bank</a> pegged that figure at nearly 13% in 2021.India's middle class has also ballooned with 60 million people now earning the rupee equivalent of more $10,000 a year — about $37,200 once adjusted for <a target="_blank" href="https://www.imf.org/external/datamapper/profile/IND">purchasing power</a>. Goldman Sachs <a target="_blank" href="https://www.goldmansachs.com/intelligence/pages/indias-affluent-population-is-likely-to-hit-100-million-by-2027.html">expects</a> the ranks of the relatively affluent to swell to 100 million by 2027."Modi has done an unbelievable job in India," JPMorgan's Dimon <a target="_blank" href="https://www.businessinsider.com/jpmorgan-jamie-dimon-economy-inflation-recession-stagflation-geopolitics-crypto-bitcoin-2024-4">told</a> the Economic Club of New York last month. "I know the liberal press here, they beat the hell out of him. He's taken 400 million people out of poverty."Musk has <a target="_blank" href="https://twitter.com/elonmusk/status/1781541775183610310">posted</a> on X that he's looking forward to visiting India and meeting Modi this year. He delayed his trip last month, blaming "very heavy Tesla obligations." The pair are expected to discuss Tesla building a multibillion-dollar factory in the country.As for Apple's Cook, he hailed India on a November earnings call as an "incredibly exciting market" and a "<a target="_blank" href="https://www.businessinsider.com/apple-tim-cook-obsessed-india-consumers-iphone-2023-7">major focus of ours</a>" given the explosive growth in potential customers as locals get richer.<div type="image" title="Sundar Pichai, Tim Cook, Narendra Modi, Joe Biden" height="3907" width="5861" msid="109838230" hostid="261" sizebytes="846512"></div>Modi has also met with Nvidia CEO Jensen Huang, Microsoft boss Satya Nadella, and Alphabet's Sundar Pichai. He's likely to be seeking to attract foreign direct investment (FDI) in India — and to capitalize on bosses' <a target="_blank" href="https://www.businessinsider.com/us-china-relations-reshoring-manufacturing-jobs-made-in-america-2023-10">desire to hedge their bets on China</a> given its strained relationship with the US, economic woes, and how disruptive its strict pandemic lockdowns were to global supply chains."India's population and economic growth numbers are causing a lot of global executives to revisit their India presence and consider scaling up," Richard Rossow, a senior advisor and chair in US-India Policy Studies at the Center for Strategic &amp; International Studies, told Business Insider."Paired with increased concerns about supply chain resilience and security concerns about China, it's a very good time for a hard push to win investments."The United Nations said that India and China both had a population of 1.426 billion in April last year, meaning India is probably now the most populous given its rising birth rate.<h2>Change for the better — mostly</h2>Modi has instigated a raft of major economic reforms since taking office, intended to make India more business-friendly, and boost government revenues by taxing more of the country's vast informal economy.He rolled out a tax on goods and services, simplified bankruptcy laws, lifted FDI restrictions, cut corporate income tax, and ended retrospective taxation.However, not all of Modi's moves spurred growth."Demonetisation was a key economic policy which had negative effects on the economy," Kunal Sen, a director of the United Nations University World Institute for Development Economics, told BI.Sen is the author of several books about India's economy and a professor of development economics at the University of Manchester.He was referring to Modi's sudden declaration in November 2016 that all 500 and 1,000-rupee bills — 86% of Indian currency in circulation — would <a target="_blank" href="https://www.businessinsider.com/india-ending-500-and-1000-rupee-bills-to-fight-corruption-2016-11">no longer be accepted as legal tender</a>.The government's goals were to capture undeclared income, get rid of counterfeit currency, broaden the tax base, and bring more activities into the formal economy."The other key economic policy was JAM — the trinity of bank accounts for the poor, mobile numbers and a biometric card. This last economic policy has been revolutionary," Sen said.He was hailing a broader digitization drive under Modi that has <a target="_blank" href="https://www.businessinsider.in/business/news/how-indias-digital-payments-ecosystem-has-evolved-in-the-last-one-year/slidelist/90595832.cms">transformed</a> how Indians bank, invest, pay their taxes, and conduct business.<h2>Prosperity for all</h2>Modi's efforts have helped to usher in a more prosperous era for some Indians, but many have been left behind.Young people are India's beating heart, with about half its population under 25 and almost two-thirds under 35. Matching those hundreds of millions of people with jobs has proven a challenge, with youth unemployment almost tripling from below 6% in 2000 to about 18% in 2019. It still stands at a hefty 10% in 2023, per the <a target="_blank" href="https://webapps.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---sro-new_delhi/documents/publication/wcms_921154.pdf">International Labor Organization</a>.The report found that nearly 30% of India's graduates were unemployed in 2022, and only about 10% of the working-age population was formally employed.<div type="image" title="A farmer uses oxen to plow fields for lentils in Nimaj, Rajasthan, northern India." height="3464" width="5196" msid="109838232" hostid="261" sizebytes="690700"></div>"Unemployment is a big issue," Rossow said, emphasizing this isn't just a problem with recent graduates but a "much, much larger bubble: the underemployed farm laborers."Rising agricultural productivity is likely to help farm workers make a faster transition to city life in the years ahead, but they'll struggle to secure modern jobs in the services industry "without significant reskilling and education," Rossow said.As a result, lower-skilled manufacturing and assembly jobs and lower-end services jobs will be needed, he added.Another major challenge will be tackling a widening wealth divide. The richest 10% of the population hold more than 72% of the nation's wealth, per an Oxfam report <a target="_blank" href="https://d1ns4ht6ytuzzo.cloudfront.net/oxfamdata/oxfamdatapublic/2023-01/India%20Supplement%202023_digital.pdf?">published</a> last year.Business tycoons Mukesh Ambani and Gautam Adani both rank among the world's 15 richest people, per the <a target="_blank" href="https://www.bloomberg.com/billionaires/">Bloomberg Billionaires Index</a>. Luxury-goods sales are booming with <a target="_blank" href="https://www.carwale.com/news/mercedesbenz-lineups-waiting-period-reduced-in-india/">long waitlists</a> for flashy purchases like the Mercedes "G Wagon."<div type="image" title="The Ambani family onstage with Rihanna." height="854" width="1280" msid="109838233" hostid="261" sizebytes="99148"></div>The <a target="_blank" href="https://www.businessinsider.com/anant-ambani-pre-wedding-festivities-lack-empathy-india-radhika-merchant-2024-3">lavish pre-wedding party</a> thrown by the Ambani family earlier this year was singled out by some as an affront to the huge number of Indians living in poverty.Almost 1.3 billion people live on less than $3,500 a year by one estimate, and India ranks 111th on the <a target="_blank" href="https://www.globalhungerindex.org/ranking.html">Global Hunger Index</a>, below even North Korea.Rising equality is partly explained by a "capital-intensive mode of economic growth along with increasing power of business conglomerates," Sen told BI, referring to how huge companies like the Adani Group secure huge government contracts to build ports, bridges, highways, and other infrastructure.A third challenge is regional inequality, as some states like Bihar and Uttar Pradesh haven't experienced the same growth and modernization of their economies as others, Rossow said.<h2>The Russia riddle</h2>One striking aspect of Modi's economic boom has been its reliance on Russia since it invaded Ukraine in early 2022.India went from getting 2% of its crude oil from Russia before the war, to 35% last year. During that period, the US and Europe slapped sanctions on Russian oil to defund Putin's military machine and punish Moscow for attacking a sovereign nation.Despite that, India purchased an estimated $37 billion of Moscow's oil in 2023 — 13 times the amount it bought annually prior to the conflict. Its buying helped Russia rake in a <a target="_blank" href="https://markets.businessinsider.com/news/commodities/russia-economy-oil-sales-india-ukraine-war-moscow-western-sanctions-2024-2">record $320 billion</a> of federal revenue last year.Indian demand for Russian oil has <a target="_blank" href="https://markets.businessinsider.com/news/commodities/russia-oil-trade-crude-india-discount-barrel-sanctions-price-cap-2024-2">cooled</a> in recent months as new sanctions have made it <a target="_blank" href="https://markets.businessinsider.com/news/commodities/russia-economy-oil-energy-exports-india-imports-revenue-sanctions-discount-2024-3">more expensive</a>, but the buying remains controversial.Officials in India have <a target="_blank" href="https://markets.businessinsider.com/news/commodities/crude-oil-prices-india-russia-trade-geopolitics-opec-supply-puri-2024-2">defended</a> the purchases, saying that if they'd bought Middle Eastern oil instead, global crude prices would have shot up.India is also one of the world's largest oil refiners and has helped Western nations to maintain access to refined petroleum products even as they're refraining from buying Russian crude directly.Yet the country imports 85% of its oil, so its overriding interest is securing the cheapest oil possible to support its development, said Neelima Jain, a senior fellow and chair in US India Policy Studies at CSIS."India will continue to buy Russian oil if the price remains favorable and allows for firm volume guarantees, as the country prioritizes energy affordability and accessibility during its rapid rural-to-urban transition, which has led to a 6% year-on-year growth in energy demand," she told BI."In an inflationary environment, economics [rather] than geopolitics will drive India's energy choices."<div type="image" title="Narendra Modi and Vladimir Putin" height="3196" width="4714" msid="109838234" hostid="261" sizebytes="426292"></div><h2>India the IT hub</h2>Under Modi, India has made big strides in modernizing its economy, combating bureaucracy, and appealing to foreign investors.Big Tech stalwarts like Microsoft have a <a target="_blank" href="https://www.businessinsider.com/microsoft-has-so-many-patents-its-outsourced-the-job-to-india-2013-5">long history</a> of outsourcing to India, but recent efforts to cut red tape and slash corporate taxes appear to have fueled fresh interest.Sweeping layoffs at Alphabet, Amazon, Meta, Salesforce and other US tech titans in the past few years could presage a large exodus of jobs to India.Sanjay Shetty of Randstad India <a target="_blank" href="https://economictimes.indiatimes.com/tech/technology/outsourcing-hubs-like-india-to-bag-40-of-jobs-lost-to-layoffs/articleshow/101088673.cms?">told The Economic Times</a> last summer that he expected 30% to 40% of the tech jobs eliminated globally to move to India by 2025."India is going to be the biggest gainer in the medium to long term, as almost every company that we speak to is looking at expanding its India base," Shetty said.Even if that pans out, it won't be a panacea for a country facing not just unemployment and underemployment, but also stark income inequality, regional disparities, and the risk of alienating Western allies by continuing to buy Russian oil.Yet overall, India appears to be headed in the right direction."The growth is real, if focused on a few key states," Rossow said. "India's dynamic technology services sector is to IT services what China is to manufacturing. So there is much to cheer, even as the reform agenda seems to never end."

Tech titans love Modi's economic powerhouse India — despite mass unemployment and abject poverty 

New Delhi, Along with the sharp decline in poverty in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, there has also been a marked reduction in the rural-urban income divide in the country, according to an SBI Research analysis of a Consumer Expenditure Survey released on Tuesday. Rural Poverty has staged a significant 440-basis point decline since 2018-19 and <keyword id="20742154" type="General" weightage="20" keywordseo="urban-poverty" source="keywords">Urban Poverty</keyword> a 170-basis point decline post-pandemic, which shows that the government initiatives for promoting the welfare of the bottom of the pyramid are having a significant beneficial impact on rural livelihood, the report states. Rural Poverty is now at 7.2 per cent (25.7 per cent in 2011-12 while <keyword id="19945793" type="General" weightage="20" keywordseo="urban" source="keywords">Urban</keyword> Poverty is at 4.6 per cent (13.7 per cent in 2011-12), official data show. The report further states that India is becoming more aspirational as indicated by the increasing share of discretionary consumption (like spending on beverages, intoxicants, entertainment, durable goods, etc.) in rural and urban areas. The speed of aspiration is swifter in rural areas as compared to urban areas The SBI report states that the difference between rural and urban monthly per capita consumption expenditure (MPCE) is now at 71.2 per cent, a rapid decline from 88.2 per cent in 2009-10. Around 30 per cent of the Rural MPCE is explained mainly due to steps taken by the government in terms of DBT transfers, investments in building of rural infrastructures, augmenting farmer's income, all together improving the rural livelihood significantly. Enhanced physical infrastructure is enabling two-way rural-urban mobility, which is the prime reason for the incrementally shrinking horizontal income gap between the rural and urban landscape and the vertical income gap within rural Income classes, according to the SBI report. The states once considered laggards are showing the maximum improvement in rural and urban gap. States like Bihar, <keyword id="19894922" type="General" weightage="20" keywordseo="uttar-pradesh" source="keywords">Uttar Pradesh</keyword>, Madhya Pradesh are showing increasingly the impact of these factors, the report adds. The bottom half of the rural pyramid are now having consumption patterns mostly converging to urban counterparts. The report also states that revised MPCE weights in CPI computation could help India real GDP growth for FY24 to top 7.5 per cent. Other highlights: *Rural and Urban consumption are growing, on an average, at nearly the same growth rate (2.66 per cent for rural, 2.59 per cent for Urban) across classes. Using the statistical equivalent of <keyword id="20744250" type="General" weightage="20" keywordseo="gini-coefficient" source="keywords">Gini Coefficient</keyword>, Horizontal Consumption Inequality between Rural and Urban across fractiles has declined from 0.560 to 0.475 *Urban Rural gap as a percentage of rural consumption is on a declining trend. It has declined from 90.8 per cent in 2004-05 to 71.2 per cent in 2022-23 and we believe, is projected to further decrease to 65.1 per cent in 2029-30 *In the lowest segment, urban consumption is only 46 per cent more dissimilar than the rural counterpart. Across fractile classes, urban consumption is only 68 per cent more dissimilar than rural counterpart, a number much less than the all India average. This indicates the bottom half of the rural pyramid are now having MPCE patterns mostly converging to Urban counterparts.

India's rural-urban income gap declines sharply amid fall in poverty level: SBI Report

<ul class="summary-list"><li>The pre-wedding festivities for Anant Ambani and Radhika Merchant cost many millions of dollars.</li><li>Critics say the big spending highlights the wealth disparity in India, where many live in poverty.</li></ul>The lavish <a target="_blank" href="https://www.businessinsider.com/ambani-wedding-guests-celebrities-performance-dress-code-party-billionaire-2024-3?r=US&amp;IR=T#the-couple-hosted-a-communal-dinner-for-51-000-people-1">pre-wedding festivities for Anant Ambani,</a> the son of <a target="_blank" href="https://www.businessinsider.com/how-rich-mukesh-ambanis-india-2020-1">Asia's richest person,</a> and Radhika Merchant, also the child of a billionaire, made headlines worldwide for their extravagance.But critics say it showed a telling disregard for the struggles of the many millions of Indians living in poverty.Spanning three days, the <a target="_blank" href="https://www.businessinsider.com/anant-ambani-mom-nita-worked-hours-months-pre-wedding-reliance-2024-3">pre-nuptial event</a> included a <a target="_blank" href="https://www.businessinsider.com/rihanna-ambani-wedding-performance-india-lazy-pregnant-first-show-years-2024-3">private performance by Rihanna,</a> which <a target="_blank" href="https://www.businessinsider.com/how-much-costs-music-star-rihanna-beyonce-ambani-wedding-performance-2024-3?r=US&amp;IR=T">estimates suggest cost up to $9 million</a>. There was a trail featuring live animals and a nine-page dress code.The mother of the groom-to-be, Nita Ambani, wore a necklace worth valued at some $60 million, which Business Insider noted was perhaps one of the <a target="_blank" href="https://www.businessinsider.com/nita-ambani-jewelry-at-anant-ambani-pre-wedding-celebration-2024-3?r=US&amp;IR=T">biggest shows of wealth.</a>Almost half of the 1.4 billion people in India live below the median poverty line of $3.65 a day, per the <a target="_blank" href="https://pip.worldbank.org/country-profiles/IND">World Bank,</a> and activists say the ostentatious displays of wealth are an affront to the country's poor.<h3>'It feels unfair'</h3>"There is so much poverty all around," said Shyam Bihari, a Delhi fruit seller and social worker, in a conversation with BI."It feels unfair to see this amount of money being spent on a wedding when so many people are still unable to access basic necessities like food and water," he said.Large swathes of India's population have long grappled with food insecurity and water scarcity.According to the <a target="_blank" href="https://www.wfp.org/countries/india">World Food Programme,</a> a quarter of the world's undernourished people live in India. <a target="_blank" href="https://www.wateraid.org/in/stories/the-daily-struggle-for-water-in-bundelkhand#:~:text=India%20is%20home%20to%2063.4,make%20such%20challenges%20more%20acute.">WaterAid says</a> that around 35 million Indians lack access to safe water.Rajni Haldia, a Delhi-based cleaner who earns $25 a month, told BI that she felt "very bad" watching the coverage of the lavish pre-wedding festivities while knowing the extent of poverty in India.Haldia said: "I hope all the rich people who came to India for the wedding are seeing the difference between the rich and poor, and I hope the government can do more to tackle this."Rakhi Tripathi, a peace activist and associate professor at New Delhi's FORE School of Management, told BI that the extravagant celebrations show a "disconnect" between India's elite and the rest of the population.Tripathi pointed out that <a target="_blank" href="https://www.bnnbloomberg.ca/india-allots-142-billion-for-free-grains-to-800-million-people-1.2004794">800 million of India's 1.4 billion population receive monthly food rations</a> of wheat or rice.She said: "In a country like this, when we have such a huge event, spending crores of rupees, yeah, lack of empathy is the correct word."(Crore is an Indian term for 10 million; 1 crore rupees is around $120,000.)Sohini Kar, an associate professor at the London School of Economics, whose work focuses on urban India, told BI she agrees."I certainly think there's a lack of empathy, awareness," she said.(A representative for the Ambanis did not immediately respond to a request for comment from BI.)Kar also said the festivities were emblematic of the troubling levels of wealth disparity in India.According to <a target="_blank" href="https://bi.slack.com/archives/D06089ABVLM/p1709898345719679">Oxfam International</a>, the top 10% of the Indian population holds 77% of the total national wealth.In the US, the St Louis Fed says <a target="_blank" href="https://www.stlouisfed.org/institute-for-economic-equity/the-state-of-us-wealth-inequality">the figure is 66.6%</a>.The groom-to-be's father, <a target="_blank" href="https://www.businessinsider.com/how-rich-mukesh-ambanis-india-2020-1">Mukesh Ambani</a>, has an estimated net worth of $113 billion, making him the richest person in Asia and the 11th richest person globally, per the <a target="_blank" href="https://www.bloomberg.com/billionaires/?embedded-checkout=true">Bloomberg Billionaires Index</a>.Kar noted that the family is known in India for its extravagance, and lives in a skyscraper.She said: "Their house itself in Mumbai is a stark reminder of the kind of disparity of wealth, where you can sort of visually see this massive house for one family over the slums around their area."According to Architectural Digest India, the 27-story property cost an estimated <a target="_blank" href="https://www.businessinsider.com/ambani-house-photos-altamount-road-mumbai-spa-parking-amenities-art-2024-3?r=US&amp;IR=T#:~:text=The%20Ambani%20family%20owns%20the,contains%20a%20168%2Dcar%20garage.">$1 billion to build</a>. It towers over <a target="_blank" href="https://www.bloomberg.com/billionaires/?embedded-checkout=true">Mumbai's Golibar slum.</a>In 2011, Ratan Tata, another of India's richest men, told <a target="_blank" href="https://timesofindia.indiatimes.com/city/mumbai/Antilla-Mukesh-Ambanis-house-shows-lack-of-empathy-for-poor-Ratan-Tata/articleshow/8506287.cms">The Times of India:</a> "It's sad because this country needs people to allocate some of their enormous wealth to finding ways of mitigating the hardship that people have."The Ambani family does donate to charitable efforts through the Reliance Foundation. That body, founded by Nita and Mukesh Ambani, is one of the largest nonprofits in the country.<div type="image" title="Anant Ambani, son of Mukesh Ambani, Chairman of Reliance Industries, and Radhika Merchant, daughter of industrialist Viren Merchant, serve traditional Gujarati food to villagers ahead of their pre-wedding celebrations on the outskirts of Jamnagar, Gujarat, India, February 28, 2024." height="2812" width="4251" msid="108333407" hostid="261" sizebytes="852730"></div>The wedding also featured a communal dinner that fed some 51,000 local residents in Gujarat, <a target="_blank" rel=" nofollow" href="https://www.thehindu.com/news/national/anant-ambani-radhika-merchants-pre-wedding-celebrations-begin-with-anna-seva/article67898600.ece">The Hindu</a> reported.But, still, Kar suggested that the tens of millions spent on the festivities could have been spent on charitable initiatives, like addressing child malnutrition.She said: "The amount of spending they had on one event could certainly go toward a much larger program for that kind of thing."

The extravagant Ambani pre-wedding party was an affront to the millions of Indians in poverty, critics say

“Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom gold ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="105386" type="General" weightage="20" keywordseo="Demat-account" source="Orion">Demat account</keyword> than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table class="redcator-table-advance" style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 468pt; font-family: Merriweather; table-layout: fixed; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"></colgroup><tbody><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Year </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2022 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">85,009 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">89,370 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">97,426 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,02,562 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, <keyword id="3886593" type="General" weightage="20" keywordseo="domestic-gold" source="Orion">domestic gold</keyword> prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Hey, wait up for me, says LAS</h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="134904" type="General" weightage="20" keywordseo="Association-of-Mutual-Funds-in-India" source="Orion">Association of Mutual Funds in India</keyword>), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="Secured-Loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-<keyword id="947940" type="General" weightage="20" keywordseo="unsecured-lending" source="Orion">unsecured lending</keyword>. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that <keyword id="23954457" type="General" weightage="20" keywordseo="personal-loan-delinquencies" source="Orion">personal loan delinquencies</keyword> in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">How does it work?</h2>Both these loans work on a similar principle: Your <keyword id="857141" type="General" weightage="20" keywordseo="loan-amount" source="Orion">loan amount</keyword> is equal to a certain percentage of the actual market value of your asset. This is known as the LTV (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

After years of intensified focus on <keyword id="19897423" type="General" weightage="20" keywordseo="COVID-19" source="keywords">COVID-19</keyword>, <keyword id="19992404" type="General" weightage="100" keywordseo="Tuberculosis" source="keywords">tuberculosis</keyword> (TB) has once again emerged as the leading <keyword id="20564668" type="General" weightage="20" keywordseo="infectious-disease" source="keywords">infectious disease</keyword> killer worldwide. This resurgence is a sobering reminder that despite our pandemic response, TB has continued to claim lives, especially in low- and middle-income countries (LMICs), where resources are often stretched thin. According to the latest <keyword id="19896311" type="General" weightage="20" keywordseo="World-Health-Organization" source="keywords" meta.keywordsubtype="org" meta.entityname="World Health Organization" meta.hostid="261" meta.entityid="World Health Organization">World Health Organization</keyword> (<keyword id="19895006" type="General" weightage="20" keywordseo="WHO" source="keywords">WHO</keyword>) report, approximately 8.2 million people were diagnosed with TB in 2023, marking the highest number of cases recorded since global monitoring began in 1995. <h2><keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> and Indonesia</h2>The recent spike in TB cases is largely driven by increases in two countries — India and Indonesia. Together, they accounted for 45% of the global rebound in TB diagnoses between 2021 and 2023, underscoring their critical role in the worldwide fight against TB. Three other countries, the Philippines, Nigeria, and Pakistan, also made significant contributions, collectively accounting for another 32% of the increase. This means that more than three-quarters of the global resurgence in TB can be traced to these five countries alone. One key reason for these increases is the “backlog” effect created by COVID-19 disruptions. During the pandemic, healthcare systems in many countries, including India and Indonesia, had to shift focus to COVID-19, which delayed TB diagnosis and treatment. In 2023, as these countries ramped up recovery efforts, many previously undetected TB cases surfaced, creating an apparent spike in reported numbers. This trend highlights the importance of sustainable healthcare infrastructure capable of handling simultaneous health crises. <h2>Gaps in TB case detection</h2>Despite the daunting increase in TB cases, some countries have made notable progress in <keyword id="23741990" type="General" weightage="20" keywordseo="treatment-coverage" source="keywords">treatment coverage</keyword>. Among the 30 high-burden TB countries, those with the highest levels of treatment coverage in 2023 included Brazil, India, Mozambique, Papua New Guinea, Sierra Leone, Uganda, and Zambia, with coverage rates surpassing 80%. India’s <keyword id="21052657" type="General" weightage="20" keywordseo="national-tuberculosis-elimination-program" source="keywords">National Tuberculosis Elimination Program</keyword> (NTEP) has undoubtedly played a pivotal role in this, aiming to eradicate TB by 2025 — five years ahead of the global target. By focusing on expanded testing, improved diagnostic tools, and more accessible treatment options, India has achieved high treatment coverage levels despite the challenges. <div type="Article" hostid="261" msid="114732986" title="Air Quality Alert: Nearly 30% of asthma cases tied to fine particulate matter exposure from bad air" mstype="2" mssubtype="0"></div>However, a significant treatment gap remains. The difference between estimated TB incidence and actual diagnoses still affects millions, especially in countries with large populations like India, Indonesia, Pakistan, China, and Myanmar. These five nations together account for about 50% of the global gap in reported TB cases, with India alone responsible for 16% of the discrepancy. <h2>India’s unique position in the global TB fight</h2>As the nation with the largest share of global TB cases, India has a unique and critical responsibility in addressing the disease. The high TB burden in India is tied to several factors, including undernutrition, poverty, and limited access to healthcare in rural areas. Moreover, with 26% of all TB cases globally, India’s battle against TB will significantly impact the global fight. The government’s financial support for TB-affected households also aims to reduce the economic burden of treatment. However, challenges remain, especially with <keyword id="22004277" type="General" weightage="20" keywordseo="multidrug-resistant-TB" source="keywords">multidrug-resistant TB</keyword> (MDR/RR-TB). While treatment success rates for MDR/RR-TB have reached 68%, diagnosing and treating all drug-resistant cases is an ongoing challenge. In 2023, India’s coverage of preventive treatment for TB among people living with HIV and close contacts of TB patients also saw improvements, but underfunding continues to limit the full scope of TB elimination efforts. <h2>Global funding gaps</h2>Global funding shortages for <keyword id="21039793" type="General" weightage="20" keywordseo="TB-prevention" source="keywords">TB prevention</keyword> and treatment are a significant hindrance to progress. Only $5.7 billion of the targeted $22 billion in funding was met in 2023, and for LMICs — where nearly all of the TB burden lies — the available funding falls well short of their needs. The United States remains the largest bilateral donor, and contributions from the Global Fund to Fight AIDS, Tuberculosis, and Malaria are crucial. However, these funds are not enough to meet essential TB service requirements, leaving healthcare systems under-resourced. <div type="Article" hostid="261" msid="114646545" title="Doctors struggle to treat long Covid patients in India; researchers point to inadequate studies" mstype="2" mssubtype="0"></div>Even in 2022, only one-fifth of the $5 billion target for research funding was achieved, as per the report. This underfunding hampers the development of improved diagnostics, drugs, and vaccines, which are crucial to TB prevention and treatment. Moreover, many of the drivers of TB are related to social factors, such as undernutrition, smoking, alcohol use, and diabetes, making it imperative to address these root causes. For instance, almost half of the TB-affected households globally face what the WHO calls "catastrophic costs" in seeking treatment. This burden is particularly severe in India, where low-income families often forgo treatment due to financial constraints. As WHO’s Director-General Dr Tedros Adhanom Ghebreyesus puts it, "The fact that TB still kills and sickens so many people is an outrage, when we have the tools to prevent it, detect it, and treat it.” The WHO’s Global tuberculosis report 2024 can be accessed <a href="https://www.who.int/teams/global-tuberculosis-programme/tb-reports/global-tuberculosis-report-2024">here</a>.

Tuberculosis dethrones COVID-19 as world’s top infectious killer again; Half of all new cases from India, Indonesia

<ul class="summary-list"><li>India's Prime Minister Narendra Modi had his power pegged back in elections this week. </li><li>It was also the 35th anniversary of the Tiananmen Square massacre in China. </li></ul><a target="_blank" href="https://www.businessinsider.com/narendra-modi-won-already-seeing-cost-him-allies-cabinet-funding-2024-6">Narendra Modi's strongman ambitions</a> suffered a setback this week.His Bharatiya Janata Party (BJP) party fell<a target="_blank" href="https://www.businessinsider.com/narendra-modi-win-bjp-india-election-explained-2024-6"> short of the landslide victory </a>many had predicted in the Indian elections.As Modi becomes India's prime minister for a third time, his party will have to enter into a power-sharing agreement with alliance partners.It's a chastening lesson from the Indian electorate for Modi, who, while boosting India's global standing, has been accused of stoking division and weakening India's democracy.On the same day as the Indian election results, <a target="_blank" href="https://www.state.gov/on-the-35th-anniversary-of-tiananmen-square/">the world marked the 35th anniversary </a>of the June 4, 1989 Tiananmen Square massacre, which saw a brutal crackdown on pro-democracy protesters in Beijing.In the decades since, China has slid back into Maoist-style authoritarianism.The events this week highlighted how the competition between India and China is about more than raw power. It's also a competition between two very different political ideologies.<h2 id="6acd91a8-36b3-408f-85c1-259d5944f4e0">India is a flawed but thriving democracy</h2>India is the world's largest democracy. Its first elections were held in 1951-52 after it gained independence from Britain. Free elections have been held in nearly every election cycle since, with a coup in 1975 briefly threatening India's democratic status.It is a rare bright spot in a world where democracy seems to be in retreat. Even in the US, the global champion of democracy, former president Donald Trump is accused of launching an attempt to cling to power illegally after losing the 2020 election.<div type="image" title="Indian voters" height="683" width="1024" msid="110819479" hostid="261" sizebytes="88454"></div>"India isn't a perfect democracy but it is still a role model for developing nations, large or small. And given trends in some Western democracies, I would have to say that there are several things they, too, should be learning from India," said Jabin T. Jacob, an expert on India-China relations at Shiv Nadar University, India.India's democracy, though, faces a stern test under Modi, say critics. Global democracy watchdog <a target="_blank" href="https://www.bbc.co.uk/news/world-asia-india-56393944">Freedom House in 2021</a> downgraded India's democratic status, saying Modi's Hindu nationalist movement had menaced journalists, attacked Muslims, and corroded civil liberties.Jacob said this week's results showed India's democracy remained resilient despite the pressures, while dealing a blow to a leader seen to have overstepped his authority."We have just seen an election in which the Indian electorate decided that their interests are best served by power shared more evenly among a set of political formations that represent diverse interests and aspirations. That is the essence of democracy," he said."The Indian electorate is a very mature one, and it has always intervened in a timely fashion against authoritarian tendencies in its rulers."It's unclear whether Modi will now double down on the nationalism he's championed or seek a more moderate path based on economic reform.<h2 id="c1fe728e-200a-4edb-8d77-94ea6111c952">China's rise comes at a high cost</h2>There are those in India, though, <a target="_blank" href="https://www.ft.com/content/daa87f88-ae0e-11e3-974d-00144feab7de">who have been astonished</a> at the speed and efficiency of China's rise to economic superpower status.China has become the world's second-largest economy, and the lives of millions of ordinary Chinese people have been transformed. Though India has made huge economic progress under Modi, it still lags behind.<div type="image" title="China high speed rail" height="644" width="1024" msid="110819477" hostid="261" sizebytes="117068"></div>"Perhaps the greatest challenge democracy faces in India is that is has failed to deliver the kind of sustained economic development enjoyed by neighbors like China over the last four decades. It has also failed to eliminate extreme poverty," wrote Chatham House <a target="_blank" href="https://www.chathamhouse.org/2022/04/democracy-india">analyst Gareth Price in 2022.</a>But with prosperity in China, has come reduced freedom.Since Tiananmen Square 35 years ago, China's Communist Party has rolled back many of the freedoms its citizens once had.Its current leader, Xi Jinping, has imposed a draconian surveillance state and is considered <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-ai-wreak-havoc-america-world-economy-2024-6">China's most authoritarian ruler</a> since Mao Tse Tung.Dominic Chiu, an analyst with the Eurasia Group, told Business Insider that China's system had given it an economic advantage — but at a cost."China's one-party rule in the reform era enabled consistent long-term policymaking and economic planning," he said. "This benefited China's economy immensely when the leadership decided to liberalize markets, privatize industries, and open the country up to foreign investment." But, he said, China's repressive one-party system was also deterring investors. And with China's <a target="_blank" href="https://www.businessinsider.com/china-falls-out-of-love-with-natural-diamonds-industry-struggles-2024-6">economy experiencing a steep </a>downturn, this poses a serious problem for its future growth.<h2 id="ebafe111-fa5e-49b8-95d3-f92a674d0da2">China and India vie for dominance</h2>Having achieved economic superpower status, China is now seeking to assert its power more aggressively both regionally and internationally.Tensions with India are increasing. In 2020, clashes along the countries' Himalayan border resulted in the death of 20 Indian soldiers and four Chinese.<div type="image" title="India-China border" height="683" width="1024" msid="110819475" hostid="261" sizebytes="158650"></div><a target="_blank" href="https://uk.news.yahoo.com/modi-mission-assert-indias-global-123002908.html">Analysts told BI</a> that building stronger alliances to counter Chinese aggression will be one of the core aims of Modi's third term.And its commitment to democracy hands it an important advantage, said Jacob."India's democratic status is critical for its international standing. It is an opportunity to develop a model of economic and political development that is both equitable and democratic and thus distinct from the aggressive capitalism of the US or the authoritarianism of the PRC," he said.In 2021, India entered<a target="_blank" href="https://uk.news.yahoo.com/modi-went-straight-reelection-needling-103142130.html"> into the "Quad" partnership </a>with democracies the US, Japan, and Australia, to counter what is perceived as growing Chinese aggression in the Pacific and Indian Ocean.It's a political alliance that would've been more difficult to broker if India was ruled by an authoritarian government,<a target="_blank" href="https://www.brookings.edu/articles/democracy-and-the-us-india-relationship/"> say observers.</a><h2 id="b9b7d5ac-0c25-43f4-adf2-9128d9242020">Competing nationalist visions</h2>Some analysts, though, say that the competition between India and China is not, at its core, about competing political systems but about competing nationalist visions.According to this interpretation, both Xi and Modi are committed to restoring what they see as their nation's rightful place at the top of the global order.But in his quest to strengthen India, critics are warning Modi not to undermine the commitment to democracy and pluralism they believe is at the heart of its post-independence success.Jacob said those in India jealous of China's economic might should look more closely at the reality."Indians who argue against democracy using the China comparison clearly don't understand anything about the reality of China and the Chinese people," he said.

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