Indian Economy News & Discussion - Nov 27 2017

[kvraghav]

One more thing is why should we have NBFC and then bail them out? The overall theme of the NBFC is risk based lending with high returns. The same with co operative banks. If govt is bailing out risk based high return investments, i even suggest them to reimburse share market losses. The debt investments like FD are considered safe because the banks does lot of due diligence and lends to less risky businesses or individual. If they are lending to highly leveraged business with huge DE ratio or they are providing to NBFC which means indirectly funding high risk investments. What's the point of debt based investments then? You can very well invest in share market instead of FD then since there at least, i can partially withdraw money during losses.

[Suraj]

India's economy to return to normal faster than expected: Barclays

Barclays lifted its fiscal 2022 growth forecast for the Indian economy to 8.5% from an earlier projection of 7%, saying the country would "return to normal" faster than expected as the COVID-19 curve in the world's second-most populous nation starts flattening.

The brokerage, however, revised down its GDP forecast for the current fiscal year to negative 6.4% from negative 6%. It expects GDP to fall by 8.5% in the second quarter of the current fiscal year, almost in line with the Indian central bank's forecast.

Last week, the Reserve Bank of India (RBI) projected GDP to contract by 8.6% in the July-September quarter, implying the country was likely to have entered a technical recession in the first half of the year for the first time in its history.

Barclays said on Thursday it expects growth in GDP will resume in the third quarter of the current financial year, a quarter earlier than the RBI's projection.

Last month, a Reuters poll showed the Indian economy would rebound by 9.0% in fiscal 2022, after suffering its deepest contraction on record this fiscal year.

[KL Dubey]

It seems Seb has moved nine orchards to India:

https://timesofindia.indiatimes.com/bus ... 314846.cms

[Vamsee]

Link

Indian Forex reserves have reached a fresh lifetime high of $572B. With this we are now just $11.1B behind Russia. We will probably go ahead of Russia in next 1-2 weeks and have 4th largest Forex reserve in the world.

After that we have the only 3 countries that have ever crossed $1T in reserves.

[Sicanta]

One more thing is why should we have NBFC and then bail them out? The overall theme of the NBFC is risk based lending with high returns. The same with co operative banks. If govt is bailing out risk based high return investments, i even suggest them to reimburse share market losses. The debt investments like FD are considered safe because the banks does lot of due diligence and lends to less risky businesses or individual. If they are lending to highly leveraged business with huge DE ratio or they are providing to NBFC which means indirectly funding high risk investments. What's the point of debt based investments then? You can very well invest in share market instead of FD then since there at least, i can partially withdraw money during losses.

As per RBI report, NBFCs were the largest net borrowers of funds from the financial system with gross payables of around Rs 8,29,468 crore and gross receivables of around Rs 66,635 crore as at end-September 2019.

A further breakup of payables showed that 48.4 per cent of the funds were obtained from banks, followed by 26 per cent from mutual fund companies and 21.3 per cent from insurance firms, it said.

Their failure will have chain effect on entire financial industry. As to why banks lend to these NBFC's heavily, its because before ILFS scam, it was seen as a venue of high returns as banks themselves could not/do not lend to high risk indiviuals/ firms due to regulatory concerns. After ILFS, banks were vary of lending even to high rated NBFC's which impacted credit offtake. Therefore the gov specifically did the following -

PSBs buy ₹14,667 cr. in NBFC bonds and paper

https://www.thehindu.com/business/psbs- ... 095638.ece

[tandav]

One more thing is why should we have NBFC and then bail them out? The overall theme of the NBFC is risk based lending with high returns. The same with co operative banks. If govt is bailing out risk based high return investments, i even suggest them to reimburse share market losses. The debt investments like FD are considered safe because the banks does lot of due diligence and lends to less risky businesses or individual. If they are lending to highly leveraged business with huge DE ratio or they are providing to NBFC which means indirectly funding high risk investments. What's the point of debt based investments then? You can very well invest in share market instead of FD then since there at least, i can partially withdraw money during losses.

As per RBI report, NBFCs were the largest net borrowers of funds from the financial system with gross payables of around Rs 8,29,468 crore and gross receivables of around Rs 66,635 crore as at end-September 2019.

A further breakup of payables showed that 48.4 per cent of the funds were obtained from banks, followed by 26 per cent from mutual fund companies and 21.3 per cent from insurance firms, it said.

Their failure will have chain effect on entire financial industry. As to why banks lend to these NBFC's heavily, its because before ILFS scam, it was seen as a venue of high returns as banks themselves could not/do not lend to high risk indiviuals/ firms due to regulatory concerns. After ILFS, banks were vary of lending even to high rated NBFC's which impacted credit offtake. Therefore the gov specifically did the following -

PSBs buy ₹14,667 cr. in NBFC bonds and paper

https://www.thehindu.com/business/psbs- ... 095638.ece

We are beneficiaries of the NBFC lending. Their loans helped us grow when no bank was willing to lend to us. In the last 2 years as an MSME if any institution has been useful I would argue it is the NBFCs. Our bank refused to give us loans and we had been banking with them for 15 years. We literally fell on their feet and rolled left and right but no dice. The NBFC guys came and got us loans sitting in our offices and we did not move a finger. Yes the interest rates were high (about 18% or more for unsecured loans but there was no other option). I did feel that the NBFC loans were risky (to the lender) and was worried about unscrupulous people using the NBFC route to take loans, cash out, default and runaway to foreign lands.

But to a very large number of business folks NBFCs were a lifesaver

[kvraghav]

That is what I was suggesting. If the banks lend to nbfc and nbfc lends to high risk business, dosent it mean banks themselfs are lending to the high risk business? The NBFC are just making cool profit like comission agents. The capital they invest themselves is far less than their borrowed investments. I don't know why banks refused to lend to you but any bank will lend if a good collateral is provided. I think we should move away from the NBFC model to a VC funding model for people who cannot provide collateral. Most of the VC funding comes from their own capital.

[V_Raman]

VC funding model in India is mimicing whats in the west. Commoners are not sophisticated enough avail that. NBFCs are Indian common man's VCs.

[Suraj]

Link

Indian Forex reserves have reached a fresh lifetime high of $572B. With this we are now just $11.1B behind Russia. We will probably go ahead of Russia in next 1-2 weeks and have 4th largest Forex reserve in the world.

After that we have the only 3 countries that have ever crossed $1T in reserves.

Yes, inflows continue to be strong through the Hindu festival season. Good chance we'll make it to close to $600B by year end.

Only three countries have ever had >$1 trillion in forex reserves. Only 7 have ever had over $500B in reserves - the current top 6 plus Saudi Arabia in the past. India were the 6th to make it, and Taiwan just became the 7th.

[Mollick.R]

Does India’s PLI Scheme Put The Cart Before The Horse?
Bloomberg Quint Opinion Rajeev Kher
Published On :- November 20 2020, 2:29 PM

https://www.bloombergquint.com/opinion/ ... -the-horse


Some good points, some rants...........

[Karan M]

That is what I was suggesting. If the banks lend to nbfc and nbfc lends to high risk business, dosent it mean banks themselfs are lending to the high risk business? The NBFC are just making cool profit like comission agents. The capital they invest themselves is far less than their borrowed investments. I don't know why banks refused to lend to you but any bank will lend if a good collateral is provided. I think we should move away from the NBFC model to a VC funding model for people who cannot provide collateral. Most of the VC funding comes from their own capital.

The NBFC are taking risk with a better understanding of a high risk market than the PSBs. The PSBs by investing in this segment, arguably with GOI approval are shoring up a critical sector. They are also spreading their risk across NBFCs. The NBFCs by lending to a segment that is underserved, earn their risk premium. VC funding t the scale we require typically, typically occurs in a HNI flush society, we are a long ways from that. Thry also look for disproportionate success as versus steady, solid businesses.

[Karan M]

Does India’s PLI Scheme Put The Cart Before The Horse?
Bloomberg Quint Opinion Rajeev Kher
Published On :- November 20 2020, 2:29 PM

https://www.bloombergquint.com/opinion/ ... -the-horse


Some good points, some rants...........

A lot of rants. There are no perfect policies- you iterate as you go along.

[nandakumar]

Does India’s PLI Scheme Put The Cart Before The Horse?
Bloomberg Quint Opinion Rajeev Kher
Published On :- November 20 2020, 2:29 PM

https://www.bloombergquint.com/opinion/ ... -the-horse


Some good points, some rants...........

It seems to be behind a paywall. Can you post some highlights? Thanks.

[vijayk]

https://economictimes.indiatimes.com/pr ... 289193.cms

any one access has to this

[Paul]

Deleted

[Mollick.R]

Does India’s PLI Scheme Put The Cart Before The Horse?
Bloomberg Quint Opinion Rajeev Kher
Published On :- November 20 2020, 2:29 PM

https://www.bloombergquint.com/opinion/ ... -the-horse

Some good points, some rants...........

It seems to be behind a paywall. Can you post some highlights? Thanks.

Saar, its open access. I suggest you try after cleaning your browser history or open with an alternate browser which you don't use regularly.

[Mollick.R]

India risks losing to a China-backed trade bloc defeating very reason it exited last year
By Shruti Srivastava, Bloomberg Last Updated: Nov 26, 2020, 10:57 AM IST

https://economictimes.indiatimes.com/ne ... 419629.cms

Seems like RECP lobbyist article, we don't have proper access to those markets and neither they are main market for our engineering goods exports...........................

[Yagnasri]

Such dramas are only going to increase now.

[chetak]

Modi's attention to exploring a mix of diverse energy sources seems to have paid off

Harshil હર્ષિલ@MehHarshil

Indophobic newspaper @nytimes published this cartoon during Paris Climate Summit.

In 2020 #India is the only G20 nation on track to meet the goal of Paris pact.




#ParisAgreement

[Yagnasri]

With infection numbers which were falling for almost 6 weeks, now increasing, we may be looking at the second series of lockdowns. PM is visiting various vaccine research entities personally.

https://twitter.com/ANI/status/1332263607501950976?s=20

Winter conditions may also contribute to infection danger.

[nam]

An important data point for us: Top 10 Chinese exports

http://www.worldstopexports.com/chinas-top-10-exports/

Top 3, Mobile phones & Tablets, Computers and Integrated Circuits make up more than 450B worth of Chinese exports! 450B!
Most of them would be dominated by Taiwanese, SK & Japanese OEM companies.

You want growth, it is staring in front of us. None of them are high technology like chip manufacturing. Need to get computers and IC in to the country, by hook or crook.

[nam]

Once we manage too get these high value manufacturing in to India, we would have cracked probably the two biggest money maker in the world: IT services and Electronics manufacturing.

Something which even the Chinis cannot claim to have..

[nam]

In October..

https://twitter.com/gandabherunda/statu ... 8266828800

Something strange happening in China since last week. Every available cargo slot for outbound, both air & sea, has been booked by Apple. Looks like lot of equipment’s & machinery are being transported out of China. Guess what, most of these booked outbound slots are for India

[vijayk]

^^ any truth to it?

[arshyam]

^^ Not sure if related, but SSC forum has been tracking repeated (weekly) An-124 flights into MAA post-lockdown, containing, apparently, factory parts. Not sure if they were outbound from China or Korea, though.

[Suraj]

On Mac forums, there are reports that the next generation Macbook devices that were recently released, are going to be partially produced in India. One of these came from Apple Support members who were contacted by customers eager to buy the computers but wanting to know when they'd get them, since the deliveries have been delayed. They were told some of these aren't being shipped from China but from India.

[vijayk]

On Mac forums, there are reports that the next generation Macbook devices that were recently released, are going to be partially produced in India. One of these came from Apple Support members who were contacted by customers eager to buy the computers but wanting to know when they'd get them, since the deliveries have been delayed. They were told some of these aren't being shipped from China but from India.

Great news indeed if it's true ... Hope Deep state is going to pursue this even with change of guard

[Bart S]

In October..

https://twitter.com/gandabherunda/statu ... 8266828800

Something strange happening in China since last week. Every available cargo slot for outbound, both air & sea, has been booked by Apple. Looks like lot of equipment’s & machinery are being transported out of China. Guess what, most of these booked outbound slots are for India

Given that Apple outsources almost all manufacturing to contract manufacturers (Foxconn etc), with only some negligible (in terms of volumes) items like $5K+ Mac Pro workstations etc being manufactured in the US, not sure what equipment apple owns that they would be taking out of China, unless they have purchased the equipment from the contract manufacturers for whatever reason. The could have their own test and measurement (for QA etc) equipment placed with the contract manufacturers (common practice) but that wouldn't be so high in volumes, and they almost certainly do have their own NPI lines for R&D but those would mostly be in the US.

[vijayk]

https://appleinsider.com/articles/20/08 ... g-to-india
Six Apple production lines capable of $5 billion in exports allegedly moving to India

Following reports that Apple has pressed Foxconn to invest $1 billion in developing iPhone production in India, local sources claim that an unnamed iPhone manufacturer is establishing a new facility in the country. The claim also follows separate reports that Foxconn is now manufacturing the iPhone 11 Pro in the country.

In a new but inconsistent report published on Monday, The Times of India is claiming that what it calls a "contract manufacturer for Apple" is "shifting six production lines" for iPhones to India. It says that unnamed sources are saying that as well as making iPhones for sale in India itself, the new establishment will produce up to $5 billion worth of iPhones for export.

There's no detail over when that figure may be achieved. However, the report does say that it's expected the new plant will create 55,000 jobs over the next "year or so."

[nam]

I have constantly mentioned on this thread, that the trump card for us is: Taiwan. Chini adventure on the border has opened that door. Apple may shift some of the production out of China, but it is the Taiwanese gov, which will push hard on companies like Foxconn to move out of China, for sake of security.

It is not our import block, which will hurt Chinis, it is moving production by the Taiwanese companies. Need to give them more privileged access like PLI, tax breaks etc.

[vijayk]

https://twitter.com/PratapVardhan/statu ... 3877020673








https://github.com/pratapvardhan/rural-facilities-pmgsy
https://twitter.com/PratapVardhan/statu ... 3993615363

[vijayk]

https://twitter.com/barronsonline/statu ... 1025251330
vote on Barron's poll

[Vamsee]

1. India's economy officially entered into recession as the second quarter GDP contracted at a slower pace of 7.5 per cent compared to a massive 23.9 per cent in the first quarter of the current fiscal.

2. India's foreign exchange reserves rise by over USD 2.5 bn to record high of USD 575.290 bn

3. Why It May Be The Wrong Time To Give Up Hope On India - Dr V Anantha Nageswaran

[nam]

We are reaching there. It is good to see micromax competing with the chini brand. Need such speed.

https://www.wsj.com/video/india-plots-s ... 0BD0D.html

[Suraj]

OpIndia had an article making an interesting point about drop in GDP - the effect of exchange rates on real GDP growth data.
- At the start of Q1, INR traded at Rs.77.2 per dollar. And the end of Q1 it was Rs.75.76 per dollar. It actually STRENGTHENED despite the massive drop in GDP
- At the start of Q2, it traded at Rs.75.46 per dollar. At the end of Q2, it traded at Rs.73.76 per dollar, again strengthening.

For the YTD, The Rupee has weakened from Rs.72 per dollar to Rs.73.xx per dollar now. Other countries like Russia and Brazil with far lower GDP drops have had ~25% drops in their currency value for YTD. Russian forex reserves rose from $560B to $585B so far this year. Indian forex reserves rose from $455B to $575B so far this year. In absolute terms, the +$120B increase in Indian forex reserves is about as much as the growth in Chinese reserves (approx +$130 billion).

Resource extraction dominant economies tend to not see a major GDP drop if they drop their exchange rates to keep their exports competitive while driving down imports. India is not a resource extraction economy. It took the full hit of the lockdown in its numbers but both maintained its macroeconomic strengths (arguably improved it) and is seeing a restoration of its economic activity to near normal, while resource extraction economies will not see their numbers improve until the global economy can consume their resources at the same level - which may take years.

[chetak]

^^^^^^^

OpIndia article referenced by @Suraj above.

the BIF are up to their old tricks once again

kaushik basu, of late, has been spewing a constant stream of invective and bile at India in general, and Modi in particular.

whatever gets his little rocks off, i suppose.


What they never told you when they said India was the worst performing emerging economy

What they never told you when they said India was the worst performing emerging economy

So who is doing better than India? Apparently, almost everyone. I suppose this is a good time for all and sundry, from the high brow Kaushik Basu to social media based economist Dhruv Rathee to take potshots at Modi’s India.

30 November, 2020
Abhishek Banerjee

What 'liberal' media does not tell you when they paint a doomsday picture for Indian economy

How would you like to see India’s GDP grow at double digit rates? Sure, you would love that. Suppose then that India’s (real) GDP growth soars to 10%. Add to that say 4% inflation, leading to nominal GDP growth of 14%. Fantastic! I wish…

Just one catch. In return for this 14% nominal GDP growth, you must agree to the Indian Rupee crashing by 50% against the US Dollar.

How do you like the bargain now?

Of course, such a situation would never present itself in the real world. If India’s economy was chugging along at 10%, the whole world would be at India’s door. The Indian Rupee would rise in value, not fall. On the flip side, if India’s economy was doing horribly, the world would rush for the exit. The Indian Rupee would lose value.

You must have seen the headlines. As the Mint put in “plain facts,” India’s GDP, with a shocking contraction of -23.9% is pretty much at the bottom of the table of emerging economies.

Mint article on Indian economy
So who is doing better than India? Apparently, almost everyone. I suppose this is a good time for all and sundry, from the high brow Kaushik Basu to social media based economist Dhruv Rathee to take potshots at Modi’s India.

Now, here is what is missing from those “plain facts.” Did they mention what happened to the respective emerging market currencies during this same time? Every country reports GDP growth only in its national currency and not in USD.

India’s economy contracted by 23.9%. For comparison, Brazil’s GDP contracted by 11.9% and Russia’s GDP by 8%. So, did they really do better than India?

Absolutely not. Brazil’s GDP contracted by 11.9% in terms of the Brazilian Real (BRL). Russia’s GDP contracted by 8% in terms of the Russian Ruble (RUB). India’s GDP contracted by 23.9% in Indian Rupee terms.

Unless we move to the same unit, we are almost literally comparing apples to oranges to mangoes.

So what happens when we look at the respective contractions in USD terms? Here is the disaster that struck the RUB and the BRL in times of the Wuhan Coronavirus.

USD vs Russian Ruble
From 1 USD = 61.73 RUB at the beginning of the year, the RUB has collapsed to 76.09 to the dollar. That is down by over 23%!

And look at the Brazilian Real (BRL)

USD vs Brazilian Real
From 1 USD = 4.02 BRL at the beginning of the year, the BRL has collapsed to 5.34 to the dollar. That is down by nearly 33%!

And now see the Indian Rupee, almost rock solid.

USD vs INR
Down by barely 4% since the beginning of the year. As it always happens, the US Dollar gains in value during times of global distress. Even though we are facing a once in a century global crisis, the Rupee has barely lost any value.

Does it not make more sense to compare everything in same units? So Brazil lost 11.8% of its apples and India lost 23.9% of its oranges. But the price of apples fell by 33% during the same period, while the price of oranges declined only by 4%. So who really lost more?

Oh great economic minds, do tell us.

[Vips]

Govt collects Rs 1,04,963 crore GST in November, crosses Rs 1 lakh crore mark second time since April.

Goods and service tax (GST) collections for November stood at Rs 1.04 lakh crore, marginally lower than Rs 1.05 lakh crore collected in October this year, but higher than Rs 1.03 lakh crore collected in the same month last year.

The numbers showed the second consecutive month of collections clocking up more than Rs 1 lakh crore, indicating continued economic recovery, said experts.

During the month, revenues from import of goods was 4.9% higher and the revenues from domestic transaction (including import of services) are 0.5% higher that the revenues from these sources during the same month last year, the ministry added.

“Second straight month of Rs 1 lakh plus collection is certainly indicative of continued economic recovery and the collections being slightly more same month last year is quite encouraging. This should also help in containing the shortfall of GST collections caused due to the pandemic,” said Abhishek Jain, tax partner at EY.

Of the gross collections in November, Central GST stood at Rs 19,189 crore, State GST at Rs 25,540 crore, integrated GST at Rs 51,992 crore which included Rs 22,078 crore collected on import of goods, and cess was at Rs 8,242 crore, which included Rs 809 crore collected on import of goods.

The total number of GSTR-3B Returns filed for the month of November up to 30th November 2020 was 82 lakhs, the ministry added.

The government settled Rs 22,293 crore to CGST and Rs 16,286 crore to SGST from IGST as regular settlement. The total revenue earned by central government and the state governments after regular settlement in the month of November 2020 is Rs 41,482 crore for CGST and Rs 41,826 crore for the SGST.

A majority of states have shown an increase in GST collections, data from the ministry revealed, while nearly 15 states showing a dip in collections.

November proved to be a busier month than October in terms of business activity as India’s pace of business resumption touched another post-lockdown high, according to Nomura.

The Nomura India Business Resumption Index (NIBRI) came in at 89.2 for the week ended November 29, up from 88.7 recorded in the previous week, the brokerage said in a note on Tuesday.

[JTull]

UPI records over 2 bn transactions for second time in a row in November

Unified Payments Interface (UPI), the flagship payments platform of the National Payments Corporation of India (NPCI), recorded over two billion transactions for the second time in a row in November, indicating that the general population has taken to digital payments as more of a way of life.

The transactions, which had crossed the two billion mark in October, and amounted to Rs 3.86 trillion in all, rose to 2.21 billion in numbers and Rs 3.91 trillion in value in November.

Launched in 2016, the UPI crossed one billion transactions for the first time in October 2019. While it took UPI three years to reach a billion transactions in a month, the next billion came in just a year.

The UPI has rebounded sharply from its fall in April, when it recorded 0.99 billion transactions as the pandemic-induced lockdown forced people to cut spending. Since then, transactions have more than doubled, despite the economy witnessing a contraction in the first quarter.

Experts believe e-commerce platforms have contributed to this, especially in the festive season.

Many suggest transactions are now moving away from the card segment to UPI and other digital payment platforms. According to industry insiders, UPI has been growing in the P2P and person-to-merchant segments.

Since June, UPI has been recording new highs every month, with the pandemic helping accelerate its adoption.

However, UPI is fundamentally for low ticket size transactions, with the average ticket size not more than Rs 200-300. Credit cards still have higher transaction payment value.
Immediate Payment Service (IMPS) has also touched an all-time high in terms of transactions and their value. In November, IMPS clocked 339.11 million transactions worth Rs 2.76 trillion. In October, IMPS had reported 319 million transactions worth Rs 2.74 trillion.

On the other hand, Bharat Bill Payment System recorded 23.93 million transactions worth Rs 3,713.21 crore in November. And, FASTag saw transaction count increase to 124.88 million, up almost 300 per cent from last year.

https://infogram.com/untitled-1h9j6qgvzy0954g

[vijayk]

https://www.business-standard.com/artic ... 502_1.html

Q2 GDP impact: Experts scale up full-year projections for FY21
While the economy will still see a fall in FY21, it is likely to be less pronounced than what experts had forecast earlier

Analysts have started revising upwards their projections for India's economic performance in the current fiscal year (2020-21, or FY21) after gross domestic production (GDP) belied market expectations in the second quarter (Q2) of FY21 by posting moderate contraction at 7.5 per cent.

GDP had declined 23.9 per cent in the first quarter of FY21.


While the economy will still see a fall in FY21, it is likely to be less pronounced than what experts had forecast earlier.

QuantEco Research projects GDP to decline 8.3 per cent in the entire fiscal year, against its earlier forecast of a 9.5-per cent fall.

"Hence, we mark up our 2019-20 GDP growth estimate. While we acknowledge the downside risks from a resurgence in Covid infections remain real, we believe the stringency measures, if needed, will be more local in nature," says Rao.

QuantEco's base case remains of a gradual pace of recovery continuing over the next few quarters, possibly picking up if a Covid vaccine is made available by early 2021.

CARE Ratings expects the economy to shrink 7.7-7.9 per cent in FY21, against its earlier projection of an 8.2-per cent fall.

https://www.business-standard.com/artic ... 075_1.html
rom small businesses to farmers, here's how middle India is driving demand
Government data released on Friday showed the economy shrank 7.5% in the July-September quarter, performing better than analysts' expectation of an 8.8% contraction

Increased demand for air travel and hotel stays by small business owners like Mehra, accompanied by a rise in rural incomes and spending after two good monsoons, is helping the pandemic-hit Indian economy slowly recover.

Government data released on Friday showed the economy shrank 7.5% in the July-September quarter, performing better than analysts' expectation of an 8.8% contraction as lockdowns were eased and some pent-up demand was met. In the April-June period, the economy shrank 23.9%.

Annual growth of 3.4% in farm sector and 0.6% in manufacturing during the September quarter has raised hopes of an early recovery and some service sectors such as trade, hotels and transport contracted at a much slower pace compared with the April-June period.

Farmers, benefiting from a bumper crop, are lapping up tractors while demand for personal vehicles, due to a lack of public transport and the need for safer travel options, has boosted sales of cars and motorcycles.

There has also been an uptick in goods and services, tax collections and higher energy consumption.

A recovery is taking shape and it has been led by the manufacturing sector which has moved from near annihilation in the July quarter to rebound mode, said Yuvika Singhal, an economist at QuantEco Research.

"Until there is a stronger recovery in high contact service sectors, which make up 60% of the GDP, agriculture and manufacturing are expected to carry the growth," said Singhal, adding that India is still growing on a lower GDP base and it will take more than a year to recover lost output.

RURAL REVIVAL ROBUST

In the hinterlands, the impact of COVID-19 has not been as severe as in the big cities and farmers have benefited from good rainfall for two consecutive years leading to a bumper harvest and adequate conditions for winter-sown crops. This is driving up sales for tractor makers like Mahindra & Mahindra.

Lack of adequate and safe public transport in small towns and villages has also pushed up demand for cars and motorcycles.

Maruti Suzuki, India's biggest carmaker, had a 10% growth in rural sales between July and September versus a 4% rise overall, led by small, entry-level models, said Shashank Srivastava, executive director, marketing and sales.

"While Bharat (rural India) is leading India in terms of a recovery, it cannot carry India," he said, adding that steady, long-term demand will depend on improving economic factors, growing incomes and a rebound in urban markets.

https://www.business-standard.com/artic ... 265_1.html
5G prospects compelling for India; spectrum can spur growth: Qualcomm
Indian regulators will have a big role to play in ensuring that 5G in India is deployed to its "full potential"

India has a big market that needs to upgrade and set up for 5G offtake, and the government and policy makers can trigger growth of the telecom space by releasing spectrum, including 5G, in adequate quantity and at affordable prices, a senior official of Qualcomm has said.

5G would positively impact India's telecom market, the second largest in the world and "still growing", as increased data consumption and heightened adoption of technology due to the pandemic has prepared the market for the advent of next-generation technology, said Rajen Vagadia, VP and President, Qualcomm India and SAARC.


"The case for the immediate rollout of 5G networks in India is a compelling one. It is no longer a choice, but a pre-requisite for the country's growth and development," Vagadia told PTI.

Indian regulators will have a big role to play in ensuring that 5G in India is deployed to its "full potential".

[DavidD]

I have constantly mentioned on this thread, that the trump card for us is: Taiwan. Chini adventure on the border has opened that door. Apple may shift some of the production out of China, but it is the Taiwanese gov, which will push hard on companies like Foxconn to move out of China, for sake of security.

It is not our import block, which will hurt Chinis, it is moving production by the Taiwanese companies. Need to give them more privileged access like PLI, tax breaks etc.

How do you suppose the Taiwanese government can compel Foxconn et al. move anywhere? It's not like they have a vast internal market as leverage. They can't even keep their companies and talents in Taiwan, you think they can make them move to foreign countries?

The Taiwanese companies will manufacture wherever it makes economic sense, so things like tax breaks will help. The best the Taiwanese government can do is to use similar incentives like tax breaks, grants, etc. which they're already doing.