The new year began on positive sentiments with vaccination drives across the world including India. What has helped further is the reduction in active Covid-19 cases in the country. It looks like the peak in infections has been passed and this is somewhat helping the recovery in economic activity for India. The challenge remains in immunization of the huge population and avoiding risk of spikes or new strains from affecting the country. These developments have ushered in hopes of improvements and are supported by growth forecasts of international financial institutions. The efforts of Invest India and revised non-personal data protection framework are covered in this article.
Fitch Future Forecast – Fitch Ratings recently released its research report “India Set for Slow Medium-Term Recovery“. The report mentioned that Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5% a year over FY23 to FY26. A combination of supply-side scarring and demand-side constraints – such as the weak state of the financial sector – will keep the level of GDP well below its pre-pandemic path, Fitch Ratings says. It further mentions that India’s coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support. The economy is now in a recovery phase that will be further supported by the rollout of vaccines in the next months and we expect GDP to expand by 11.0% in FY22 after falling by 9.4% in FY21.
IMF Hopes for 2021 – The International Monetary Fund (IMF) recently released its World Economic Outlook (WEO), January 2021 update titled ‘Policy Support and Vaccines Expected to Lift Activity’. The report mentioned that amid exceptional uncertainty, the global economy is projected to grow 5.5 percent in 2021 and 4.2 percent in 2022. The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies. The report further mentioned that ‘Notable revisions to the forecast include the one for India (2.7 percentage points for 2021), reflecting carryover from a stronger-than-expected recovery in 2020 after lockdowns were eased’. The growth forecast for India was raised to 11.5% for 2021 and 6.8% for 2022. This forecast makes it the only major economy expected to register a double-digit growth amidst the COVID-19 pandemic. The 11.5% growth will largely be mechanical, as the economy normalises from an estimated 8% contraction in the ongoing fiscal year, IMF chief economist Gita Gopinath said recently. Days ahead of the union budget, Gopinath suggested that India continue its direct cash support schemes to the poor in 2021, including the expanded employment guarantee scheme, while prioritising public infrastructure spending. In the previous IMF WEO in October 2020, the forecast for India was 8.8%, as reported by Asia Law Portal.
World Bank Forecast Moderated – The World Bank recently released its January 2021 Global Economic Prospects Report which stated that in India, the pandemic hit the economy at a time when growth was already decelerating. Output for India is estimated to contract by 9.6% in fiscal year 2020/21, reflecting a sharp drop in household spending and private investment. The informal sector, which accounts for four-fifths of employment, has also been subject to severe income losses during the pandemic. Recent high frequency data indicate that the services and manufacturing recovery is gaining momentum. India is expected to post a current account surplus in FY2020/21, mainly driven by weak domestic demand, after almost two decades of deficits. In India, growth is expected to recover to 5.4% in 2021, as the rebound from a low base is offset by muted private investment growth given financial sector weaknesses where non-performing loans were already high before the pandemic.
UN Body Awards Invest India – The United Nations Conference on Trade and Development (UNCTD), a permanent intergovernmental body established by the United Nations General Assembly in 1964, which supports developing countries to access the benefits of a globalized economy more fairly and effectively and helps equip them to deal with the potential drawbacks of greater economic integration, has recently awarded Invest India at the UN Investment Promotion Awards. Invest India won the award in recognition of the breadth of the services and information that it has offered the Indian investment community since the onset of the pandemic. A prime example of its work is the creation of Invest India’s comprehensive Business Immunity Platform. The platform offers services such as a COVID-19 helpdesk, information on central and state advisories, notifications and government support measures and the latest news on the pandemic. Invest India is the national investment promotion and facilitation agency of India and acts as the first point of reference for investors in India. The award recognizes and celebrates the outstanding achievements and best practices of investment promotion agencies (IPAs) across the globe. The evaluation was based on UNCTAD’s assessment of work undertaken by 180 IPAs.
Non-Personal Data Proposed Framework – A Committee of Experts has been constituted to deliberate on Non-Personal Data Governance Framework and the committee drafted its report which was published for public feedback/suggestions by September 13, 2020, as reported by Asia Law Portal. Based on the public feedback/suggestions, the Committee has recently revised its earlier report and a revised draft report has been prepared for the second round of public feedback/suggestions, with last date to submit the feedback/suggestions extended till January 31, 2021. There a number of changes proposed which include removal of categories of non-personal data, mutual exclusiveness with the Personal Data Protection Bill, 2019, option for data principal to opt out, data custodian can be a private organization, specific definition of data trustee, removal of reference to data trust and expansion in the functions of non-data protection authority.