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<ul><li>India's economy grew by 6.3% in Q2 of FY23 as compared to 8.4% growth it had seen in Q2 FY22. </li><li>Analysts predicted that the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. </li><li>China registered an economic growth rate of 3.9% in July-September, 2022. </li></ul>India's economy grew by 6.3% in the second quarter of the current fiscal, official data released on Wednesday showed. The gross domestic product (GDP) had expanded by 8.4% in the July-September quarter of 2021-22, according to data released by the National Statistical Office (NSO). Analysts had projected the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. According to rating agency ICRA, the GDP was likely to grow at 6.5% while State Bank of India projected the growth rate at 5.8% in the September 2022 quarter. Earlier this month, in an article published in the Reserve Bank of India (RBI) bulletin, the GDP growth was pegged at 6.1-6.3% in the second quarter of this fiscal year. China registered an economic growth rate of 3.9% in July-September, 2022. ‘Manufacturing disappointed with negative growth rate’ Bank of Baroda report said that the Q2 GDP numbers were slightly lower than their forecast of 6.5%. “While most numbers were on expected lines, manufacturing has been a disappointment with a negative growth rate. In case of manufacturing it has been clearly affected by low growth for the small and medium enterprises (SME) sector as per index of industrial production (IIP) numbers, and fall in profits that has affected value added for the organized sector,” said Madan Sabnavis, chief economist of Bank Of Baroda. He added that the agriculture growth of 4.6% should be viewed with caution as it is early days of Kharif harvest, and the allied sectors are more likely to have pushed up this growth rate. “We do expect GDP growth to be around 6.8% for the year, with a downward bias depending on the changing economic environment. But the downside will not be more than 0.2-0.3%,” said Sabavis. Mining and manufacturing sectors have both witnessed negative growth rates. While the mining sector growth might have been affected by a high base effect, combined with fall in output of oil and gas. FY23 GDP downgrades continue In the first quarter of FY23 as lockdowns ended, GDP expanded by 13.5%. However, this was also lower than most estimates – sending many agencies and the RBI itself to revise their growth projections of the year to 7% this September, from 7.2% earlier. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s said that it </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Goldman Sachs, like CRISIL, believes that India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. All in all, most agencies believe that it has become tougher to predict the pace of growth since the pandemic. “We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of the pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap in a report released on November 28. (With inputs from PTI) SEE ALSO <a href="https://www.businessinsider.in/finance/news/no-end-to-downgrades-in-gdp-estimates-as-economists-remain-divided-on-severity-of-slowdown/articleshow/95847763.cms">No end to downgrades in GDP estimates as economists remain divided on severity of slowdown</a> <a href="https://www.businessinsider.in/india/news/government-listed-private-companies-capex-to-touch-21-lakh-crore-in-fy23-icici-securities/articleshow/95858117.cms">Capex cycle to touch ₹21 lakh crore in FY23, but there's a catch</a>

India's GDP growth comes in at 6.3% in Q2: manufacturing, mining witness negative growth

<ul><li>The Reserve Bank of India on Thursday made a moderate revision in its growth and inflation outlook for FY24. </li><li>Citing robust urban demand and a healthy growth in rural demand during Q4, <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> increased the FY24 GDP growth outlook to 6.5% from 6.4% earlier. </li><li>RBI has projected FY24 inflation at 5.2% from 5.3% earlier, citing robust rabi harvest, easing commodity prices and expectations of a normal monsoon. </li></ul>The Reserve Bank of India on Thursday revised India’s economic growth outlook upwards, expecting a real gross domestic product (GDP) growth rate of 6.5% in FY24, crediting it to a resilient economy in Q4 FY23. This is a 10 basis point increase from the previous Monetary Policy Committee (<keyword id="6369693" type="General" weightage="80" keywordseo="mpc" source="Orion">MPC</keyword>) announcement in February, which pegged FY24 GDP growth at 6.4%. RBI governor Shaktikanta Das announced the upward revision in the GDP growth outlook during the<a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms"> MPC announcement today</a> while keeping the repo rate unchanged at 6.5%. Das said that the Indian economy is projected to grow at 7.8% in Q1 FY24, and subsequently at 6.2%, 6.1% and 5.9% in the second, third and fourth quarters, respectively. <div type="image" title="India GDP FY24 RBI projection April 2023." msid="99289989" hostid="261" sizebytes="13812" caption="&amp;lt;p&amp;gt;RBI&amp;#39;s FY24 GDP growth projection&amp;lt;/p&amp;gt;"></div> “While the numbers may not really be significant, the messaging is subtle that the MPC expects the economy to fare well on both counts this year,” said Madan Sabnavis, chief economist, Bank of Baroda. <cmsannotation type="cmsannotation" annotationid="Resilient economy, healthy growth in rural demand" comment="subhead" text="Resilient economy, healthy growth in rural demand">Resilient economy, healthy growth in rural demand</cmsannotation> Crediting the upward revision to a resilient economic performance in Q4, Das said that the overall demand scenario was robust in Q4 – while urban demand remained robust, rural demand had also seen a healthy growth in consumer non-durables, tractors and two-wheeler sales. “Looking ahead, the higher rabi production has brightened the prospects for the agriculture sector and rural demand. The steady growth in contact-intensive services should be positive for urban demand,” Das said. According to the analysts at ICICI Securities, too, high frequency indicators like GST collections, auto sales, air traffic, power demand, among other factors suggest that data does not corroborate the thesis of a slowdown in India. In contrast, data does suggest a slowdown in developed markets, the brokerage said. Echoing similar sentiments, Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, said, “The RBI remains comfortably on the growth front, for now. We believe the risks to this outlook are skewed towards the downside.” With that being said, some analysts say RBI’s 6.5% growth projections could be slightly on the optimistic side. It is worth noting that the World Bank revised India’s FY24 growth projections slightly downwards to 6.3% from 6.6% earlier. “The 6.5% GDP growth rate appears to be on the optimistic side when seen in the context of a slowing global economy,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. The Asian Development Bank too expects India’s growth to moderate to 6.4% in FY24 from 6.8% in FY23. Das, too, hedged growth expectations by stating that there are additional downside risks from financial stability concerns, alluding to the banking sector crisis in the US and Europe. For context, the International Monetary Fund, too, has trimmed the 2023 growth outlook for the global economy to 2.9% from 3.4% in 2022. <cmsannotation type="cmsannotation" annotationid="Inflation expected to soften, but battle not over yet" comment="subhead" text="Inflation expected to soften, but battle not over yet">Inflation expected to soften, but battle not over yet</cmsannotation> In a similar vein, RBI has trimmed its consumer price index (CPI) inflation expectations for FY24 marginally from 5.3% earlier to 5.2% now. <div type="image" title="CPI inflation FY24 RBI projection April 2023." msid="99290019" hostid="261" sizebytes="13944" caption="&amp;lt;p&amp;gt;RBI&amp;#39;s FY24 CPI inflation projection&amp;lt;/p&amp;gt;"></div> However, RBI’s battle against inflation is not over yet – in fact, Das said that the MPC will step in if the need arises. “The war against inflation will continue until we see a durable decline in inflation, closer to the target. The MPC will not hesitate to take further action as may be required in its future meetings,” Das said. He also noted that the core inflation is still ‘rigid’, further reinforcing the fact that the inflation battle will be “gradual and protracted”. One of the factors which could spoil RBI’s inflation projections is the threat of El Niño, which could adversely impact farm output. Earlier, the Finance Ministry had also flagged its concerns amidst an IMD prediction of above-normal temperatures in India this year. “An El Nino this year will negatively impact kharif sowing and next year’s rabi sowing due to lower availability of water,” said JM Financial. On the whole, while making marginal revisions in its GDP and inflation outlook, Das said he is confident that the MPC is on the right track and is maintaining an agile stance to ensure the financial system’s stability, recalling Kautilya’s (also known as Chanakya) advice: “Be not slack before the whole job is finished”. The first MPC meet of FY24 has set a positive tone on both the critical fronts of growth and inflation. It remains to be seen if it is on the right track or if a course correction is required down the path. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbis-monetary-policy-committee-keeps-repo-rate-unchanged-at-6-5/articleshow/99284354.cms">RBI’s Monetary Policy Committee keeps repo rate unchanged at 6.5%, for now</a> <a href="https://www.businessinsider.in/stock-market/news/after-the-ides-of-march-analysts-pick-best-stocks-that-can-be-bought-on-dips/articleshow/99272438.cms">After the Ides of March, analysts pick best stocks that can be bought on dips</a> <a href="https://www.businessinsider.in/finance/news/-jio-financial-services-demerger-and-listing-a-key-moment-for-reliance-stock/articleshow/99264110.cms">Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock</a>

RBI revises India’s FY24 growth outlook, expects softer inflation on the back of lower commodity prices

Industry body <keyword id="6355001" type="ORGANIZATION" weightage="20" keywordseo="ficci">Ficci</keyword> on Sunday said its Economic Outlook Survey has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent. With the rapid spread of COVID-19 pandemic manifesting into an economic and healthcare crisis globally, the latest forecast marks a sharp downward revision from the growth estimate of 5.5 per cent reported in the January 2020 survey, it said. The pandemic outbreak has severely impacted the economic activities as the country had to go through a lockdown to check spread of the virus. However, the restrictions are being gradually eased. While addressing SBI Banking and Economics Conclave on Saturday, RBI Governor Shaktikanta Das said the Indian economy has started showing signs of getting back to normalcy in response to the staggered easing of restrictions. "It is, however, still uncertain when supply chains will be restored fully; how long will it take for demand conditions to normalise; and what kind of durable effects the pandemic will leave behind on our potential growth," he said. In May, the Reserve Bank had said the GDP growth during 2020-21 is likely to remain in the negative territory. Releasing details of the survey, Ficci said the present round of 'Economic Outlook Survey' was conducted in June 2020 and drew responses from leading economists representing industry, banking and financial services sector. "The latest round of Ficci's Economic Outlook Survey puts forth an annual median GDP growth forecast for 2020-21 at (-) 4.5 per cent - with a minimum and maximum growth estimate of (-) 6.4 per cent and 1.5 per cent respectively for 2020-21," it said. As per the survey, the quarterly median forecasts indicate GDP growth to contract by (-) 14.2 per cent in the first quarter of 2020-21, with a minimum estimate of (-) 25 per cent and a maximum estimate of (-) 7.4 per cent. Economic activity-wise annual forecast indicated a median growth of 2.7 per cent for agriculture and allied activities for 2020-21. "Agriculture seems to be the only sector with a silver lining right now. There is an apparent upside as far as the performance of monsoon is concerned this year and the water reservoir levels in the country stand at good levels," the industry chamber said. According to the survey, the rural sector supported by a steady agriculture performance and hopefully a contained number of COVID-19 cases will be a key demand generator for India this year. The survey further said that industry and services sector, on the other hand, are expected to contract by 11.4 per cent and 2.8 per cent, respectively in 2020-21. Weak demand and subdued capacity utilisation rates were already manifesting into a drag on investments and the COVID-19 pandemic has further extended the timeline for recovery, it said. Even though activity in sectors like consumer durables, FMCG is gaining traction, majority of the companies are still operating at low capacity utilisation rates. Labour availability and feeble demand remain as major issues for the companies, it added. "Therefore, fresh investments will be difficult to come by in the near to medium term. Also, a significant change in consumption patterns is expected on back of uncertainty with regard to jobs and income losses," Ficci said. It noted that absence of demand stimulus, a second wave of the pandemic and continuation of social distancing and quarantine measures will weigh heavy on growth prospects. "With demand and investment outlook muted, robust government expenditure has been the only saviour. Nonetheless, growth is likely to bottom out post the second quarter of current fiscal year," it said. According to the survery, some of the stimulus measures are reaching to the ground – especially through the credit guarantee scheme for MSMEs and support through MGNREGA – which is positive. During the survey, economists were asked to share their views on the fiscal stimulus package 2.0 and any additional measures that can be undertaken. Participants were of the view that government measures in stimulus focussed broadly on saving lives and undertaking deep structural reforms. "They, therefore, felt that while the quasi fiscal measures and structural reforms announced were undoubtedly steps in the right direction, on ground implementation and results will take a long time to work through in the present environment," it added. A majority of economists believed that the government could have undertaken "a more aggressive" fiscal stance than what has been announced in the two packages combined. Participating economists also highlighted that the measures announced by both the Reserve Bank of India and government focussed largely on addressing supply side constraints with limited support for creation of demand. Ficci said the surely participants unanimously believed that the RBI would undertake further cuts in the repo rate going forward to minimise the economic shock and stabilise financial markets. Nonetheless, a majority of the participants also opined that cutting interest rates would not pump economic growth given that the demand conditions have remained subdued from even before the COVID pandemic struck the economy. The fast-changing macroeconomic environment and deteriorating outlook for growth necessitated off-cycle meetings of the Monetary Policy Committee (MPC) of the RBI – first in March and then again in May 2020. The MPC decided to cumulatively cut the policy repo rate by 115 basis points over these two meetings, resulting in a total policy rate reduction of 250 basis points since February 2019. Ficci said economists were asked to suggest ways with which India could best utilise the present opportunity to expand its presence in the global value chains. Efforts towards liberalisation of FDI policy must be complemented with improving infrastructure and ease of doing business in the country, it added. RSN NKD BAL

GDP growth in 2020-21 likely to be negative, says FICCI survey

<ul><li>Fitch Ratings has revised its outlook on India’s sovereign rating to ‘stable’ from ‘negative’.</li><li>It, however, has cut India’s growth forecast for this year to 7.8% due to inflationary impact of the global commodity price.</li><li>The agency also highlighted that India’s gross domestic product (GDP) recovered by 8.7% in FY22.</li></ul>Fitch Ratings has revised its outlook on India’s sovereign rating to ‘stable’ from ‘negative’. The rapid economic recovery in India made credit rating agency Fitch revise its outlook on India from negative to stable. The report released today also said that weakness in the financial sector is easing — which aided their outlook revision notwithstanding near-term headwinds from the global commodity price shock. It, however, has cut India’s growth forecast for this year to 7.8% due to inflationary impact of the global commodity price. Previously, the agency predicted the growth of 8.5% for the fiscal year 2023. High nominal GDP growth facilitated a near-term reduction in the debt-to-GDP ratio. But the agency said that public finances remain a credit weakness with the debt ratio broadly stabilizing, based on its expectation of persistent large deficits. “The rating also balances India's external resilience from solid foreign-exchange reserve buffers against some lagging structural indicators,” Fitch said. The agency also highlighted that India’s gross domestic product (GDP) — monetary value of final goods and services produced in a country — recovered by 8.7% in FY22, which shows that the country has witnessed a strong recovery from the shocks of Covid-19. <cmsannotation type="cmsannotation" annotationid="Near term growth will be decent, but challenges remain" comment="subhead" text="Near term growth will be decent, but challenges remain">Near term growth will be decent, but challenges remain</cmsannotation> Fitch Ratings expects India’s economy to grow at the rate of 7% between FY24 and FY27, facilitated by the government’s push for better infrastructure, agenda reformation and reducing pressure on the financial services sector. “India's strong medium-term growth outlook relative to peers is a key supporting factor for the rating and will sustain a gradual improvement in credit metrics,” the report added. However, it also cautioned against the uneven nature of economic recovery and implementation risks for infrastructure spending as well as reforms. <cmsannotation type="cmsannotation" annotationid="Financial sector has been improving" comment="subhead" text="Financial sector has been improving">Financial sector has been improving</cmsannotation> Fitch added that the financial sector was a key growth impediment before the pandemic but the situation has been improving. The sector should facilitate better credit allocation and investment in the medium term. “Banks' capital sufficiency will be important in determining their ability to provide more credit, even as regulatory forbearance has given them time to rebuild capital buffers. Potential asset-quality deterioration from the pandemic shock appear manageable, but there are risks as forbearance measures unwind amid heightened global macroeconomic uncertainty,” Fitch said. <cmsannotation type="cmsannotation" annotationid="Fiscal deficit to narrow down" comment="subhead" text="Fiscal deficit to narrow down">Fiscal deficit to narrow down</cmsannotation> The report forecasts that India’s fiscal deficit could narrow down from 10.7% of the GDP in FY22 to 10.5% of the GDP in FY23. Eventually, Fitch expects India’s fiscal deficit to reduce to 8.9% of the GDP in the next three years, but with challenges. “High interest payments/revenue of 26% of GDP in FY22 ('BBB' median: 7%) constrains fiscal flexibility, particularly in the context of rising sovereign bond yields. We forecast the aggregate state deficit to gradually return to its pre-pandemic norm of 3.0% of GDP over the next several years from 3.8% in FY22,” the report said. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/the-stock-markets-will-go-through-one-more-steep-fall-but-it-will-be-the-last/articleshow/92120895.cms" style="">‘The stock markets will go through one more steep fall, but it will be the last’</a> <a href="https://www.businessinsider.in/business/startups/news/cred-joins-byjus-and-swiggy-in-the-top-10-most-valued-startups/slidelist/92120493.cms" data-type="tilCustomLink" style="">CRED joins Byju’s and Swiggy in the Top 10 most valued startups — check out the list</a> <a href="https://www.businessinsider.in/finance/news/1-in-2-micro-loans-are-being-rejected-since-april-thanks-to-rbis-new-microfinance-framework/articleshow/92106939.cms" style="">1 in 2 micro loans are being rejected since April, thanks to RBI's new microfinance framework</a>

Indian economic recovery impresses Fitch which changes outlook to stable

<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."

You Searched For "india negative gdp" and got 5 results

India's GDP growth comes in at 6.3% in Q2: manufacturing, mining witness negative growth

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GDP growth in 2020-21 likely to be negative, says FICCI survey

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Indian economic recovery impresses Fitch which changes outlook to stable

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

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