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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

Reserve Bank <keyword id="20595794" type="General" weightage="20" keywordseo="Governor-Shaktikanta-Das" source="keywords">Governor Shaktikanta Das</keyword> on Thursday said the fundamental drivers of the <keyword id="6356076" type="General" weightage="100" keywordseo="indian-economy" source="Orion">Indian economy</keyword> are gaining momentum and the country is moving on a sustainable growth path. In the inaugural address at <keyword id="23048827" type="General" weightage="20" keywordseo="FIBAC-2024" source="Orion">FIBAC 2024</keyword>, the governor said that massive changes are taking shape in various economic sectors and markets, and the country is geared for orbital shifts. "Our nation's journey towards becoming an advanced <keyword id="19931030" type="General" weightage="20" keywordseo="economy" source="keywords">economy</keyword> is drawing strength from a unique blend of factors, and these factors would include a young and a dynamic population, a resilient and diverse economy, robust democracy, and a rich tradition of entrepreneurship and innovation," Das said. Stressing that India's growth story is intact and banks have robust balance sheets, he exhorted the private sector to step up investments in a big way. He said data actually shows that the fundamental growth drivers of the Indian economy are actually gaining momentum and they are not slowing. "This gives us the confidence to say that the Indian growth story remains intact," he said. In his speech, the governor said past reforms like GST and IBC have yielded long-term positive outcomes, and emphasised the need for further reforms in land, labour, and agri markets. While acknowledging that headline inflation matters, he said the balance between inflation and growth is well-poised. With monsoon progressing well and healthy Kharif sowing, food inflation outlook could become more favourable, he added. Das further said the <keyword id="20172097" type="General" weightage="20" keywordseo="financial-sector" source="keywords">financial sector</keyword> must expand access and harness digital platforms to drive inclusive growth. He also made a strong case for tailored products and services for women-led businesses and MSMEs without diluting underwriting standards. Das further noted that only regulated entities will be allowed on Unified Lending Interface (ULI) platform to ensure prudent lending. "ULI will not be a select club of few players," Das said.

Fundamental drivers of economy gaining momentum, India on sustainable growth path: RBI Governor Das

The composite <keyword id="726966" type="General" weightage="20" keywordseo="Purchasing-Managers-Index" source="Orion">Purchasing Managers' Index</keyword> (<keyword id="19905748" type="General" weightage="20" keywordseo="PMI" source="keywords">PMI</keyword>) stood at 60.7, in July, reflecting buoyant economic activity, though the pace of acceleration had eased compared to the previous month which was at 60.9, according to <keyword id="22709468" type="General" weightage="20" keywordseo="Anand-Rathi-report" source="Orion">Anand Rathi report</keyword>. The Services PMI, recorded at 60.3 in July 2024, has consistently held above the 60-mark for seven consecutive months. This sustained performance is attributed to strong demand, increased investment in technology, and new business gains. The favourable <keyword id="877716" type="General" weightage="20" keywordseo="economic-conditions" source="Orion">economic conditions</keyword> and optimistic expectations for future output have driven one of the strongest increases in recruitment within the sector. The Manufacturing PMI placed at 58.1 in July, indicated strong expansionary trends, driven by buoyant demand and a notable increase in international sales. Producers responded to this demand by adding stocks at a sharp pace. Despite cost increases fueled by the strong demand for input goods, producers maintained their margins by raising selling prices. The sector saw continued hiring at one of the strongest rates, although the pace of job creation was slightly softer than in June 2024. Contrasting the domestic scenario, the global manufacturing outlook appears grim. In July 2024, the G-20 Manufacturing PMI fell below the 50-mark for the fourth consecutive month, indicating a contraction. The JPMorgan Global Manufacturing PMI slowed due to weaker growth in the United States and China, coupled with an ongoing downturn in the eurozone and Japan's entry into a contraction phase. Key issues identified included declining new orders and extended vendor lead times, pointing to supply-chain disruptions. Out of 32 countries surveyed, only 15 saw increases in their Manufacturing PMIs, with India showing the fastest growth. Looking ahead, domestic economic activity is anticipated to pick up, bolstered by improved weather conditions and increased government expenditure following recent elections. However, challenges remain due to weakening global growth and rising tensions in the Middle East, which could pose headwinds to domestic growth. The survey reported a significant rise in new work, considerably above the long-period average, and strong job creation across both the manufacturing and services sectors. Inflation, reaching an eleven-and-a-half-year high, coupled with rising input costs, has added pressure on businesses. The Services PMI stood at 60.3 and maintained its strong performance, driven by technology investments, robust demand, and new business gains. Notably, the sector experienced one of the strongest growths in new export orders since 2014, indicating a healthy international demand for services. The G-20 GDP-weighted Manufacturing PMI continued its downward trend for the fourth month, falling below the 50-mark in July. The JPMorgan Global Manufacturing PMI's slowdown reflects weaker growth in major economies such as the US and China, ongoing downturns in the eurozone, and Japan's contraction. Declining new orders and extended vendor lead times due to supply-chain disruptions have significantly impacted global manufacturing activity. Despite the global challenges, India's manufacturing sector remains resilient, expanding at the quickest pace among the surveyed nations. This resilience, coupled with strong domestic demand and favourable economic conditions, is expected to support continued growth in the coming months.

India's economic momentum stays strong with composite PMI at 60.7 in July 2024: Anand Rathi report

The <keyword id="19919399" type="General" weightage="20" keywordseo="Asian-Development-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Asian Development Bank" meta.hostid="153" meta.entityid="Asian Development Bank">Asian Development Bank</keyword> (ADB) on Wednesday maintained India's <keyword id="20540008" type="General" weightage="20" keywordseo="GDP-growth-forecast" source="keywords">GDP growth forecast</keyword> at 7 per cent for the current financial year, citing that a rebound in agriculture is expected given above-normal <keyword id="22442671" type="General" weightage="20" keywordseo="monsoon-projections" source="keywords">monsoon projections</keyword>. The ADB forecast comes a day after the International Monetary Fund revised upward its GDP growth projections for India to 7 per cent compared to 6.8 per cent projected in April. Last month, the Reserve Bank of India (RBI) revised upward its growth forecast to 7.2 per cent, from 7 per cent estimated earlier. The <keyword id="19948184" type="General" weightage="20" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is on track to grow by 7 per cent in FY2024 (ending 31 March 2025) and 7.2 per cent in FY2025 (next financial year), as projected in ADO April 2024, said the July edition of the Asian Development Outlook (ADO). The Indian economy logged a growth rate of 8.2 per cent for the financial year ended March 2024, as against 7 per cent in the previous fiscal year. Services continued to expand robustly in Q4 of FY24, and the forward-looking services PMI is well above its long-term average, it said, adding, industry is also expected to grow robustly, driven by manufacturing and strong demand for construction led by housing, it said. "After muted growth in FY2023 (previous fiscal), a rebound in agriculture is expected given the above-normal monsoon projections. This is notwithstanding the slower advance of monsoon in June. A rebound in agriculture will be important to sustain growth momentum in rural areas," it said. Investment demand continues to be strong, led by public investments and bank credit is fueling robust housing demand and improving private investment demand, it said. However, it said, export growth will continue to be led by services, with merchandise exports showing relatively weaker growth. The stronger-than-expected fiscal position of the central government could provide a further boost to growth, it said. However, the report said, this must be weighed against downside risks arising from weather events and geopolitical shocks. With regard to inflation, ADO has also retained its forecast at 4.6 per cent for the current financial year and expects it to marginally decline to 4.5 per cent next fiscal. With regard to developing Asia's growth forecast, ADO said, it is revised up to 5 per cent in 2024 and maintained at 4.9 per cent in 2025. Growth projections remain broadly unchanged with respect to ADO April 2024, it said, adding, resilient domestic demand along with improved exports and manufacturing will support growth this year. The region's 2024 growth forecast has been marginally adjusted up by 0.1 percentage points due to upward revisions in the Caucasus and Central Asia along with East Asia, it said. Meanwhile, the inflation forecast for the region has fallen to 2.9 per cent in 2024, largely due to downward revisions in China and the Caucasus and Central Asia, which offset a slight increase in South Asia, it said.

Monsoon projections to ensure India's GDP growth forecast remains at 7% for FY'25: Asian Development Bank

India's GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend, said <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> deputy governor <keyword id="20244361" type="General" weightage="20" keywordseo="Michael-Debabrata-Patra" source="keywords">Michael Debabrata Patra</keyword>. He was speaking at the New York Fed Central Banking Seminar organised by the <keyword id="20238413" type="General" weightage="20" keywordseo="Federal-Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Federal Reserve Bank" meta.hostid="261" meta.entityid="Federal Reserve Bank">Federal Reserve Bank</keyword> here on Monday. "...I do believe with all the strength of my conviction that India's time has come," he said, and highlighted the country heads into its future with the youngest population in the world with a median age of 28 years. Unlike in many parts of the world, the working age population is growing -- every sixth working age person is an Indian. Patra said that since independence in 1947, India's growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019. After the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24, he said. India is now regarded as the fastest growing major economy in the world. Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, the senior RBI official said and added the country is already the third largest economy in terms of <keyword id="20776921" type="General" weightage="20" keywordseo="purchasing-power-parity" source="keywords">purchasing power parity</keyword>. "Our projections show that India's <keyword id="21013593" type="General" weightage="20" keywordseo="real-GDP-growth" source="keywords">real GDP growth</keyword> will be 7.2 per cent in 2024-25 and around 7.0 per cent in 2025-26 in a cyclical correction to the rebound from the pandemic. Thereafter, there is a strong likelihood that India's growth will revert to the 8 per cent trend," Patra said. On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement. "Our projection indicates that these price pressures will persist in October and November before headline inflation realigns with the target from December 2024 and remains aligned in 2025-26," the deputy governor said. He also emphasised that India is emerging as a world leader in leveraging <keyword id="20181895" type="General" weightage="20" keywordseo="digital-technologies" source="keywords">digital technologies</keyword> for transformative change.

India likely to grow at 7.2% in FY25, says RBI deputy governor

<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?

<ul><li>A study by <keyword id="19900426" type="General" weightage="100" keywordseo="Accenture" source="keywords" meta.keywordsubtype="org" meta.entityname="Accenture" meta.hostid="261" meta.entityid="Accenture">Accenture</keyword> says GenAI could add billions to Indian economy</li><li>The study added that 31 percent of working hours in India could be automated</li><li> Indian economy could be up by as much as USD 675 billion by 2038</li></ul> In the last two years, there have been many debates about the possibility of AI replacing human beings at their jobs. Various tech experts have expressed their opinions on this. While there is one section of people saying that AI will make it easier for human beings to do their jobs, there is another section that fears being replaced altogether. Talking about the section that thinks AI will help humans do their jobs better, various experts have said in the past that AI will focus on mundane aspects of a job so that human beings can be fully focused on more challenging and creative parts. And a new study by Accenture seems to support this argument. Moreover, the study also says that due to the use of generative AI, Indian economy could be up by as much as USD 675 billion. <h2>GenAI could add USD 675 billion to Indian economy</h2>According to the study by Accenture, adopting a people-centric approach to GenAI could potentially add USD 675 billion to India's economy by 2038. This transformative impact hinges on a bold vision for reinvention, underscored by strong data and technology foundations, and an intentional approach to workforce development. The <keyword id="22702248" type="General" weightage="20" keywordseo="Accenture-study" source="keywords">Accenture study</keyword> highlights that the deployment of GenAI could automate approximately 31 percent of working hours in India. This significant shift is expected to contribute a 0.6 percentage point increase to the annual GDP growth, showcasing GenAI's potential as a powerful economic driver. However, the journey to harnessing this potential is fraught with both opportunities and challenges. For the unversed, generative AI, a subset of artificial intelligence, involves machines generating text, images, or other media in response to prompts. This technology has far-reaching implications for industries ranging from capital markets to retail, banking, insurance, and software platforms. Globally, these sectors are expected to witness the automation or augmentation of 49% to 71% of working hours due to GenAI. <h2>31 percent automation in India</h2>The Accenture study also highlights that in the Asia-Pacific region, the impact of GenAI is anticipated to be substantial, with Australia and Japan seeing the highest impact at 45% and 44% of working hours, respectively. For India, the projection of 31% automation signifies a seismic shift in how businesses operate and how work is performed. <keyword id="22702250" type="General" weightage="20" keywordseo="saurabh-kumar-sahu" source="keywords">Saurabh Kumar Sahu</keyword>, Lead for India Business at Accenture, underscored the necessity of a bold vision for reinvention. He said that the scaled and responsible deployment of GenAI can drive revenue growth and act as a force of change, reinventing functions across industries. However, unlocking the real value of GenAI requires businesses to have robust data and technology foundations. "The scaled and responsible deployment of generative AI can not only drive revenue growth but also act as a force of change that can reinvent almost all functions across industries. To unlock its real value, businesses need to have a bold vision for reinvention anchored in a strong data and technology foundation. This, coupled with an intentional approach to skilling, is crucial to succeed in the age of generative AI," Sahu said in a statement according to a report in Business Standard. <h2>89 percent businesses plan to increase AI spending</h2>Despite the promising prospects, there is a critical gap in preparation that could hinder the effective integration of GenAI. The Accenture study reveals that while 89% of businesses plan to increase spending on AI, only 35% prioritise workforce development. Moreover, a mere 4% of business leaders have implemented GenAI training at scale. This disparity underscores the urgent need for comprehensive skill development programs. As organisations embrace GenAI, equipping the workforce with the necessary skills is important to ensuring that the technology's implementation is both effective and sustainable. SEE ALSO: <a href="https://www.businessinsider.in/artificial-intelligence/news/verizon-sees-early-success-using-generative-ai-to-answer-questions-from-business-customers/amp_articleshow/112145960.cms" data-type="tilCustomLink" target="_blank">Verizon sees early success using generative AI to answer questions from business customers </a><a href="https://www.businessinsider.in/tech/news/yup-ai-is-basically-just-a-homework-cheating-machine/amp_articleshow/112330231.cms" data-type="tilCustomLink" target="_blank">Yup, AI is basically just a homework-cheating machine</a>

Indian economy could get USD 675 billion due to AI by 2038, study shows

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

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

New Delhi [India], July 11 (ANI): The State Bank of India (SBICAPS) report, titled "<keyword id="19948184" type="General" weightage="20" keywordseo="Indian-economy" source="keywords">Indian Economy</keyword>: Maintaining Momentum on a Deteriorating <keyword id="22369631" type="General" weightage="20" keywordseo="global-pitch" source="keywords">Global Pitch</keyword>," highlights an <keyword id="20055731" type="General" weightage="20" keywordseo="optimistic-outlook" source="keywords">optimistic outlook</keyword> across several sectors of the Indian economy. The report highlights a positive outlook for most of the sectors. In the power sector, the report says persistent heat waves have led to high power demand. "Persisting heatwaves have led to record high power demand in the Northern region. Considering this, the Union has urged power companies to import equipment worth USD 33 bn to add 31 GW worth of capacity in the next 5-6 years, and there are talks that the National Electricity Plan could be revised to account for greater power demand." It says that revenue collections from FASTag have shown a continued momentum and collections are up 11.2 per cent on a June 24(YoY) basis. The growth was driven by increased traffic and a 5 per cent upward revision of toll charges. The report however says road construction pace has slowed down in the first two months of FY25. "Awarding pace is yet to pick up in FY25, while construction pace lags levels seen last fiscal. The NHAI has set its construction target for FY25 at 5,000 km (actual achievement of 762 km in 2MFY25), 22 per cent lower than FY24". Awarding contracts may have been slowed down in April-May 2024, because of elections and the imposition of the code of conduct. However, the report is optimistic about growth in manufacturing and other Industrial activities as credit to Industry is showing healthy growth. "Industry credit surged 8.9 per cent y/y in May'24 with the broad-based offtake. Higher capacity utilisation leading to capex, pick-up in MSME credit, and increased infrastructure activity are expected to boost industry segment, potentially achieving high single-digit growth in FY25." The report also acknowledges robust loan growth in the services sector, although the Reserve Bank of India's (RBI) crackdown has slowed loans to Non-Banking Financial Companies (NBFCs). But despite this, credit to areas such as trade, aviation, and commercial real estate has picked up. Personal loans, however, are not growing as quickly due to past high growth rates and increased caution around unsecured loans. Nevertheless, other types of personal loans continue to grow strongly. Overall, the report predicts credit growth to outpace overall economic growth in FY 2025 "Credit growth is expected to exceed nominal GDP growth in FY25, growing at 13-15 per cent amplified by secular long-term drivers such as buoyant economic growth, accompanied by formalisation, digitalisation, and premiumisation." The report highlights that structural changes in savings patterns are impacting the quality and quantity of deposits to sustain credit growth. Bank deposit growth has slowed down from the decadal highs of FY24. Household savings are moving towards other avenues like mutual funds and life insurance schemes. Margins of banks are getting squeezed because of a decrease in deposit growth and the recent hike in deposit rates. However, the SBICAPS report is optimistic that banks will manage and maintain their net interest margins (NIMs) nearly as strong as in FY 2024 as they were in FY 2023. In FY 2025, NIMs are expected to remain steady, with overall profits likely to be strong despite a slight moderation in return ratios. (ANI)

SBI Caps report highlights optimistic outlook for the Indian economy, despite deteriorating global pitch

<keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s world record beating <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> rate together with robust tax revenues, a fast expanding digital and financial <keyword id="19916864" type="General" weightage="20" keywordseo="infrastructure" source="keywords">infrastructure</keyword> and a strong manufacturing sector will give the new <keyword id="19900449" type="General" weightage="20" keywordseo="government" source="keywords">government</keyword> a base for unleashing next generation <keyword id="19900768" type="General" weightage="20" keywordseo="reforms" source="keywords">reforms</keyword> that may make the country a <keyword id="19953418" type="General" weightage="100" keywordseo="developed-nation" source="keywords">developed nation</keyword> by 2047. The new government will however have to tackle with problems like unemployment and rural distress, which seemed to have played a major role in voting pattern in states like Uttar Pradesh, while also keeping inflation under control. Given that no party, including BJP, have a clear majority of its own, tough reforms like big ticket privatisation and labour law reforms may take a backseat. As per the available trends, BJP is likely to win about 240 seats in a 543- member <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword>. It would have to rely on its allies like TDP and JDU to form the next government. The new government will have to build upon the 8.2 per cent <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> recorded in 2023-24 and carry on with the reforms to make India a USD 5 trillion economy in the next couple of years and a developed nation by 2047. Policy experts are unanimous in their view that the government is likely to continue its focus on infrastructure-led growth, investor-friendly policies, enabling reforms, and facilitating ease of doing business. Last week, <keyword id="20070868" type="General" weightage="20" keywordseo="SP-Global-Ratings" source="keywords" meta.keywordsubtype="org" meta.entityname="S&amp;P Global Ratings" meta.hostid="261" meta.entityid="S&amp;P Global Ratings">S&amp;P Global Ratings</keyword> had said that historically India has been on a high growth path with national consensus on key economic policies. "No matter who the incoming government is, the pro-growth policies, sustained infrastructure investments, the drive to reduce fiscal deficit -- these things have produced very good outcomes and we believe this will continue in the coming years no matter who is in charge," S&amp;P Global Ratings Analyst YeeFarn Phua said. EY India Chief policy advisor DK Srivastava said the Aatmanirbhar strategy, especially focusing on knowledge intensive employment generating and strategic manufacturing, will serve India well in the long run while providing scope for increasing both services and goods exports. "The new government will find a solid foundation of the economy, ready to take off with the objective of fulfilling India's aim of becoming 'viksit' in the next 25 years," Srivastava said. Under the Modi government's 10-year tenure India has become the fifth largest economy, from 11th globally, shaking off its image as a "fragile" economy prior to 2014. The new government will have its eyes set on taking India among the top three economies in the world. The target is "more likely" to be realised by 2027-28 fiscal, according to 16th Finance Commission Chairman Arvind Panagariya. Currently, the size of the Indian economy is USD 3.7 trillion and it is expected to become USD 7 trillion by 2030. RBI has projected a 7 per cent growth rate for the current fiscal. Deloitte South Asia CEO Romal Shetty said India is firmly on the growth trajectory as the world's fastest-growing economy and a key player in the global supply chain. "With the new government, we expect second-generation reforms driven by technology to make India a global hub of innovation and a thriving digital economy. We must further accelerate reforms to strengthen ease of doing business, boost inbound investment, and solidify India's position as the top destination for GCCs (global capability centres) and high-tech manufacturing, with a focus on jobs," Shetty said. In fact, reflecting the buoyant sentiments S&amp;P Global Ratings last week upgraded India's outlook to positive, from stable, and said it could upgrade India's sovereign rating in next 1-2 years if the government continues reforms and adheres to the path of fiscal consolidation. Last week, Moody's Ratings also said it expects policy continuity after the general election and continued focus on infrastructure development. Nangia Andersen India Chairman Rakesh Nangia said the investors' community expects continued policy reforms, particularly in labour laws and the privatization of state-owned enterprises. "Investors are also keen on prudent fiscal management, focusing on reducing the fiscal deficit while promoting growth through strategic investments. This combination of reforms and fiscal discipline is expected to create a favourable environment for sustained economic growth and increased investor confidence," Nangia said. Nangia further said that investors are also eager to see a further simplification of India's regulatory framework, more transparent and predictable policies that can enhance the ease of doing business. "This regulatory clarity is crucial for attracting more Foreign Direct Investment (<keyword id="19946824" type="General" weightage="20" keywordseo="FDI" source="keywords">FDI</keyword>) and positioning India as a key manufacturing hub driven by supply chain diversification. In recent years, there has been substantial FDI inflow into sectors such as manufacturing, computer services, and renewable energy, reflecting India's growing appeal as a destination for global investment," Nangia said.

New govt to inherit strong economy, focus on making India developed nation by 2047

India’s political landscape is increasingly being defined by the troubling nexus between crime and politics. A study has highlighted a startling correlation: the election of politicians with criminal records is directly linked to a rise in crime across the country, particularly in states with weaker institutional frameworks. As India's political system continues to grapple with this issue, the societal consequences are becoming clear. <h2>A history of <keyword id="23341122" type="General" weightage="100" keywordseo="criminal-politicians" source="keywords">criminal politicians</keyword></h2><keyword id="21026899" type="General" weightage="20" keywordseo="Pappu-Yadav" source="keywords">Pappu Yadav</keyword>, a veteran politician from Bihar, serves as a prime example of this disturbing trend. Having represented his constituency for nearly 25 years, Yadav has faced 41 criminal cases, including serious accusations of murder and kidnapping. Despite his conviction in 2008, Yadav was acquitted in 2013, and he continues to hold political influence. His case is not unique; the political scene in states like Bihar, Uttar Pradesh, and Madhya Pradesh is littered with politicians facing multiple criminal charges. Anant Singh, another prominent figure from Bihar, holds a political career shadowed by 38 criminal cases, including murder, kidnapping, and attempts to murder. These individuals represent a broader pattern where politicians accused of serious crimes continue to serve in public office despite their criminal backgrounds. "They are getting elected, and over time the number has only been going up," remarks lead author Nishith Prakash. "In some states, it could be as high as almost 40% of people who are representing the state have some kind of a criminal accusation." <h2>Crime begets crime</h2>The research delves into the ramifications of electing criminally accused politicians. The study found that states with a higher number of such politicians also experienced increased <keyword id="22044507" type="General" weightage="20" keywordseo="crime-rates" source="keywords">crime rates</keyword>. For example, states like Bihar, Madhya Pradesh, Rajasthan, Odisha, and Uttar Pradesh, known for their historically weak institutions, have seen crime rise by 4.3% annually with the election of criminal politicians. The number increases to 5.8% when the politicians are accused of serious crimes like murder and kidnapping. <div type="Article" hostid="261" msid="113692670" title="What will it take for Kangana Ranaut’s &amp;#39;Emergency&amp;#39; to finally hit theatres?" mstype="2" mssubtype="0"></div>Prakash notes that weak rule of law and institutional failure create fertile ground for such politicians to not only rise to power but also exacerbate the deteriorating law-and-order situation. When politicians themselves are involved in criminal activities, they often manipulate legal and administrative systems, further weakening law enforcement and emboldening criminal networks. The reign of <keyword id="20122630" type="General" weightage="20" keywordseo="lalu-prasad-yadav" source="keywords">Lalu Prasad Yadav</keyword>, president of the Rashtriya Janata Dal political party in Bihar, illustrates the adverse impact criminal politicians can have. Under his leadership, Bihar’s political environment devolved into what is now infamously known as "Jungle Raj," a period marked by rampant kidnappings for ransom, particularly targeting affluent individuals like doctors and schoolchildren. The researchers note that during this time, the kidnapping industry flourished as criminals enjoyed either direct or indirect support from the state. <h2><keyword id="22404298" type="General" weightage="20" keywordseo="impact-on-women" source="keywords">Impact on women</keyword> and <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword></h2>Beyond the immediate rise in general crime rates, the study revealed alarming statistics regarding crimes against women. Electing criminally accused politicians was found to increase crimes against women by 12.6%. In states where such politicians held office, female labour force participation dropped by 10-11%, as women felt unsafe and chose not to engage in work outside their homes. The research also highlighted the economic toll criminal politicians take on their constituencies. Areas represented by politicians accused of serious crimes saw economic growth lag between 2.3% and 6.5% per year compared to other regions. These leaders often misappropriate public funds, divert resources for personal gain, and enable criminal enterprises, all of which stifle local development. <h2>Legal measures taken</h2>India has made strides in identifying and tracking criminally accused politicians. A landmark 2003 ruling by the <keyword id="19895345" type="General" weightage="20" keywordseo="Supreme-Court" source="keywords" meta.keywordsubtype="org" meta.entityname="Supreme Court" meta.hostid="261" meta.entityid="Supreme Court">Supreme Court</keyword> mandated that candidates for political office must disclose their criminal records, making it easier for voters and institutions to scrutinise their backgrounds. However, the law only disqualifies convicted individuals from running for office, allowing accused politicians to continue their political careers while facing serious charges. <div type="Article" hostid="261" msid="113446721" title="It&amp;#39;s not just the rhetoric — apathy and jokes could be fueling a spiral of retaliatory political violence, expert warns" mstype="2" mssubtype="0"></div>The research conducted by Prakash and his team has caught the attention of Indian courts and the Election Commission. While reform is slow, there is growing recognition that the quality of political leadership has a profound impact on societal outcomes, from crime rates to economic performance. "The quality of politicians matters," Prakash notes. "Who you elect has implications on outcomes that we care about. It could be economic growth, it could be crime against women, it could be labour force participation. These are very important outcomes for society and the economy." The findings of this research have been published in Journal of Law Economics and Organization and can be accessed <a href="https://docs.iza.org/dp15259.pdf">here</a>.

You Searched For "indian economy growth" and got 11 results

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