India’s economic growth forecast remained stable with Moody’s predicting growth of 7.5%. This was close to the forecast of 7.6% by Reuters. The Government is aiming for a further jump in India’s ranking in the World Bank’s Ease of Doing Business Report. Finally, the demonetisation report card is out. In spite of all achievements, the sharp slide of India’s currency against the Dollar dampened spirits.

Moody’s Growth Forecast.

The Indian economy is largely resilient to external pressures and is expected to grow around 7.5% in 2018 and 2019, Moody’s Investors Service said. In its Global Macro Outlook for 2018-19, Moody said growth is supported by strong urban and rural demand and improved industrial activity, pointing to the strong PMI and the index of 8 core industries.

“A normal monsoon together with the increase in the minimum support prices for kharif crops, should support rural demand,” the rating agency said. “Thus, despite external headwinds from higher oil prices and tightening financing conditions, growth prospects for the remainder of the year remain in line with the economy’s potential.” It said economic activity grew 7.7% in the first quarter of 2018 and high-frequency indicators suggest a similar outturn for the second quarter.

Reuters’ Growth Forecast.

India likely grew 7.6 per cent in the April-June quarter, propelled in part by an improvement in manufacturing and exports, a Reuters poll showed. The median consensus in a poll of 50 economists put annual economic growth just a touch lower than the near two-year high of 7.7 per cent in the January-March quarter. Forecasts for the $2.59 trillion economy ranged between 7.0 and 8.0 per cent.

The poll results suggest domestic demand was strong, driven primarily by manufacturing activity that remained solid despite elevated oil prices and a weakening Indian rupee.

Jump Expected in Ease of Doing Business Rankings.

India’s ranking is expected to improve further in the World Bank’s ease of doing business report this year on the back of reforms carried out by the government, a top government official said today. The World Bank’s ‘ease of doing business report is slated to be released in October.

“We are optimistic that again we will be making a significant jump in the ease of doing business ranking,” Secretary of the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek said recently.

No FDI in Inventory Based E-commerce.

DIPP has effectively ruled out foreign direct investment (FDI) in inventory-based e-commerce, allaying concerns raised by those opposed to such a move, even as it agreed with the need for a regulator to oversee the sector. The department of commerce had in its recent draft e-commerce policy mooted up to 49% FDI in inventory-based e-commerce for 100% locally made goods for the majority of Indian-owned and Indian-controlled e-commerce ventures.

“There is no agreement there… it is not happening. There is no such intent,” said DIPP secretary Ramesh Abhishek. India doesn’t allow overseas investment in e-commerce companies that sell directly to customers, only in marketplaces that connect sellers with buyers. It doesn’t allow overseas investment in multi-brand retail either.

Demonitisation Report Card.

The processing of demonetised Rs 500 and 1,000 banknotes is complete, the Reserve Bank of India (RBI) said in its annual report for 2017-18, adding that 99.3 per cent of the notes, worth Rs 15.3 lakh crore have been returned to banks. Of the Rs, 15.41 lakh crore worth 500 and 1,000 rupee notes in circulation before November 8, 2016, notes worth Rs 15.31 lakh crore have been returned. The “humungous task of processing and verification of specified bank notes (SBNs) was successfully achieved,” it said.

The SBNs received were verified, counted and processed in the sophisticated high-speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded, it added. Post-demonetisation, RBI spent Rs 7,965 crore in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the Rs 3,421 crore spent in the previous year. In 2017-18 (July 2017 to June 2018), it spent another Rs 4,912 crore on the printing of currency, the annual report said.

Rupee Slides Against Dollar.

The Rupee faced a steady slide against the Dollar throughout this month. It touched 70 in mid-August from about 68 at the beginning of the month. Recently it slid by 15 paise to close at a fresh lifetime low of 70.74 to the Dollar due to month-end demand for the US currency from importers and rising crude oil prices.

In the day trade, the rupee plunged to a record low of 70.90 to the dollar as firming oil prices fanned fears of a widening the current account deficit. A stronger dollar in overseas markets and losses in local stock markets also impacted the rupee sentiment. The dollar index, which shows the dollar’s strength against a basket of currencies, was trading up 0.11 per cent at 94.56.

Posted by Sourish Mohan Mitra

Sourish Mohan Mitra, India-qualified lawyer from Symbiosis Law School, Pune and currently working as an in-house counsel in Delhi, India; views expressed are personal; he can be reached at; Twitter: @sourish247

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