India’s flagging economy draws dire warnings of recession

Source: The Economic Times, Sept 29, 2017

NEW DELHI: Prime Minister Narendra Modi came to power on a euphoric wave of promises to boost India’s economy, add millions of jobs and bring “good times” to the developing nation.

Three years later, India’s economic prospects look decidedly grimmer. India’s economic expansion has slowed to its lowest level in three years. Small businesses are struggling, or even shutting down, after overhauls of the nation’s currency and sales tax system. Modi’s own allies warn of a dire outlook, with some raising the specter of an economic depression.

While government ministers have urged patience, analysts and others in Modi’s governing Bharatiya Janata Party are not so sanguine about the current trends.
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India jumps 16 spots on Competitiveness Index

Source: Business Standard, Sept 28, 2016

India jumped 16 places for the second year in a row to the 39th rank on the World Economic Forum’s (WEF) Global Competitiveness Index 2016-17. It was ranked 55th in 2015-16. This is the largest gain made by any country on the list.

Switzerland was ranked the most competitive country for the eighth consecutive year, followed by Singapore, the United States, the Netherlands and Germany.

The rankings measure countries’ performance on three indicators — basic requirements, efficiency enhancers, and innovation and sophistication factor. Performance on these in turn is measured through sub-indicators.

“Thanks to improved monetary and fiscal policies, as well as lower oil prices, the Indian economy has stabilised and now boasts the highest growth among G20 countries. Recent reform efforts have concentrated on improving public institutions (up 16), opening the economy to foreign investors and international trade (up four), and increasing transparency in the financial system (up 15),” said the report.

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Dark clouds over India’s growth engines

Source: Business Standard, May 30, 2016

New Delhi: A rather peculiar aspect of India’s growth structure under the new Gross Domestic Product series has been the stellar performance of the micro, small and medium enterprises (MSME) in the manufacturing segment.

With the bigger manufacturing companies struggling over the past few years, it was these smaller companies that provided the much needed fillip to manufacturing growth.

The Reserve Bank of India’s analysis of the Ministry of Corporate Affairs database confirms this. Gross value added (GVA) by these companies grew at a staggering 17.3 and 16.2 per cent in 2013-14 and 2014-15, respectively, dwarfing the value addition by their larger counterparts who grew at a modest 10.1 and 12 per cent over the same period.

index

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Amazon sets the pace for e-commerce in India

index.jpgSource: Business Standard, May 26, 2016

New Delhi: Seattle-based e-commerce giant Amazon should be happy that even before it turns three in India on June 5, the company has emerged a leader in this market. Before rivals can protest, we are not talking numbers yet. The American player has won the first round simply because it has successfully pushed competition to change the narrative and metrics of the online play.

Earlier this week, the almost nine-year-old poster boy of Indian ecommerce, Flipkart, announced in three separate interviews that customer satisfaction would be its mantra from now on. GMV or gross merchandise value of goods sold on the platform, till now the benchmark for success, will be kept aside, said Binny Bansal, who became CEO of Flipkart in January. Not too long ago, Snapdeal CEO Kunal Bahl had the same to say about shedding the GMV goalpost.

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India :100% Foreign Direct Investment permitted in E-Commerce

e-commerceSource: INDOLINK

On 29th March 2016, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (DIPP) vide Press Note 3 (2016 Series) released the guidelines for Foreign Direct Investment (FDI) on E-commerce.

FDI up to 100% under automatic route (without prior approval from government) is  permitted in Business to Business (B2B) e-commerce.  Restrictions on FDI in Business to Consumer (B2C)  will continue. No FDI is permitted in B2C E-commerce.

  • A manufacturer is permitted to sell its products manufactured in India through e-commerce retail.
  • A single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

In order to provide the clarity on this, E-commerce business is categorized in two categories:

  1. Marketplace based model of E-commerce: Marketplace based E-commerce model means providing of an information  technology (IT) platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller. 100% FDI is permitted in marketplace model of e-commerce.
  2. Inventory based model of E-commerce:  Inventory based model of e-commerce means an e-commerce activity where the inventory of goods and services is owned by e-commerce entity and it sold to customers directly. FDI is not permitted in inventory based model of e-commerce.

With this press note there is more clarity about e-commerce business in India . Also,  it seems for B2C e-commerce to be open for FDI, going to take some more time.

Indian Economy to grow at robust pace; GDP growth expected in the range of 7 to 7.75 per cent in coming year

Source: IBEF.org, Mar 09, 2016

New Delhi:As per the Advanced Estimates released by Central Statistics Office (CSO), the growth of Gross Domestic Product (GDP) at constant (2011-12) market prices is estimated at 7.6 per cent in 2015-16 indicates that despite uncertainties in the global economy, Indian economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7 to 7.75 per cent in the coming year. International Monetary Fund, in their World Economic Outlook Update (January 2016) has indicated that India is projected to continue growing at a robust pace. Read the rest of this entry »

India business confidence picks up in January

indexSource: Business Standard, Jan 28, 2016

Business sentiment in India rose for the first time in three months to the highest since October 2015, as domestic orders strengthened at the start of the year, showed a survey by MNI Indicators. But, only 17 per cent of the respondents said their business performance was better under the new government, a possible indication that these companies expected faster reforms from the government. Read the rest of this entry »