India's GDP Growth To Slow Down To 6-6.8%, Forecasts Economic Survey

NEW DELHI, Feb 1: India's economic growth is forecast to be 6.5 per cent in fiscal 2024 compared to 7 per cent in the current fiscal, according to the Economic Survey released by the government a day ahead of the Union Budget presentation.

The Economic Survey forecasts a baseline gross domestic product, or GDP, growth of 6.5 per cent in real terms in fiscal 2024. Despite the lower growth forecast for next fiscal compared to the current one, the pace would still make India's growth the fastest among big economies.

"The projection is broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the IMF, and the ADB and by RBI, domestically. The actual outcome for real GDP growth will probably lie in the range of 6 per cent to 6.8 per cent, depending on the trajectory of economic and political developments globally," the Economic Survey said.

The government hopes India's GDP growth in the 6-6.8 per cent range - which is still less than the 7 per cent forecast for the current fiscal - would be possible due to certain advantages the country has over other nations amid the economic disruption caused by the COVID-19 pandemic.

In making the forecast, the Economic Survey cited limited health and economic fallout for the rest of the world from the current Covid surge in China, leaving supply chains intact in many nations including India.

More money is likely to flow into India as advanced economies face "recessionary tendencies" while India's inflation remains below 6 per cent, the Economic Survey said. This will lead "to an improvement in animal spirits" and increase private sector investment, said the government survey that reviews how the economy performed in the past year.

Fears of a recession, however, have been heightened by mass layoffs by Big Tech in recent weeks.

India has recovered fast from the pandemic, the government said. The economic growth will be supported by "solid domestic demand and a pickup in capital investment", it said. The inflation rate peaked at 7.8 per cent in April 2022, the survey said.

But the risks are also high, especially from global factors. A long period of inflation has forced central banks across the world to tighten financial conditions, the survey said, adding this tightening is visible now in the form of slowing economic activity in advanced economies.

"Another risk to the outlook originates from the ongoing monetary tightening exercise. While the pace of rate hikes has slowed, major central banks have reaffirmed their hawkish stance on inflation," the Economic Survey said.

Finance Minister Nirmala Sitharaman will present the Union Budget tomorrow. It would be her fifth Budget since 2019. She may tweak income-tax slabs to provide relief to the nation's middle class and increase spending on the poor with programmes such as rural jobs.

GST Collection At ₹ 1.55 Lakh Crore In January

NEW DELHI, Feb 1: The GST collection in January surged to over ₹ 1.55 lakh crore, the second highest-ever mop-up, the finance ministry said on Tuesday.

"The gross GST revenue collected in the month of January 2023 till 5:00 PM on 31.01.2023 is ₹ 1,55,922 crore of which CGST is ₹ 28,963 crore, SGST is ₹ 36,730 crore, IGST is ₹ 79,599 crore (including ₹ 37,118 crore collected on import of goods) and cess is ₹ 10,630 crore (including ₹ 768 crore collected on import of goods)," the ministry said in a statement.

The revenues in the current financial year up to January 2023 are 24 per cent higher than the GST revenues during the same period last year.

This is for the third time, in the current financial year, GST collection has crossed ₹ 1.50 lakh crore mark. The GST collection in January 2023 is the second highest next only to the ₹ 1.68 lakh crore gross mop-up reported in April 2022.

"Over the last year, various efforts have been made to increase the tax base and improve compliance. The percentage of filing of GST returns (GSTR-3B) and of the statement of invoices (GSTR-1), till the end of the month, has improved significantly over years," the ministry said.

In the October-December 2022 quarter, a total of 2.42 crore GST returns were filed till the end of the next month compared to 2.19 crore in the same quarter of the last year. This is due to various policy changes introduced during the year to improve compliance, it added.

IMF Predicts Global Growth To Fall To 2.9%

WASHINGTON, Jan 31: The International Monetary Fund (IMF) on Tuesday said it is expecting some slowdown in the Indian economy next fiscal year and projected the growth to 6.1 percent from 6.8 percent during the current fiscal ending March 31.

The IMF on Tuesday released the January update of its World Economic Outlook, according to which the global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024.

“Our growth projections actually for India are unchanged from our October Outlook. We have 6.8 percent growth for this current fiscal year, which runs until March, and then we're expecting some slowdown to 6.1 percent in fiscal year 2023. And that is largely driven by external factors,” Pierre-Olivier Gourinchas, Chief Economist and Director, Research Department of the IMF told reporters here.

“Growth in India is set to decline from 6.8 percent in 2022 to 6.1 percent in 2023 before picking up to 6.8 percent in 2024, with resilient domestic demand despite external headwinds,” said the IMF's World Economic Outlook update.

According to the report, growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3 percent and 5.2 percent, respectively, after the deeper-than-expected slowdown in 2022 to 4.3 percent attributable to China's economy.

China's real GDP slowdown in the fourth quarter of 2022 implies a 0.2 percentage point downgrade for 2022 growth to 3.0 percen -- the first time in more than 40 years with China's growth below the global average. Growth in China is projected to rise to 5.2 percent in 2023, reflecting rapidly improving mobility, and to fall to 4.5 percent in 2024 before settling at below 4 percent over the medium term amid declining business dynamism and slow progress on structural reforms.

“Overall, I want to point out that emerging market economies on the whole and developing economies seem to be already on their way up. We have a slight increase in growth for the region from 3.9 percent in 2022 to 4 percent in 2023,” Gourinchas said.

“Another relevant point here is that if we look at both China and India together, they account for about 50 percent of world growth in 2023. So a very significant contribution,” he said.

“I want to say, we had a positive view on India in our October forecast. That positive view is largely unchanged,” Gourinchas said in response to a question.

In a blog post he wrote that India remains a bright spot. Together with China, it will account for half of global growth this year, versus just a 10th for the US and euro area combined, he added.

For advanced economies, the slowdown will be more pronounced, with a decline from 2.7 percent last year to 1.2 percent and 1.4 percent this year and next. Nine out of 10 advanced economies will likely decelerate, Gourinchas said.

The US' growth will slow to 1.4 percent in 2023 as Federal Reserve interest-rate hikes work their way through the economy. Euro area conditions are more challenging despite signs of resilience to the energy crisis, a mild winter, and generous fiscal support, he said.

“With the European Central Bank tightening monetary policy, and a negative terms-of-trade shock — due to the increase in the price of its imported energy — we expect growth to bottom out at 0.7 percent this year,” Gourinchas wrote.

Adani Enterprises Shares Rise, Other Group Stocks Extend Losses On Hindenburg Impact

NEW DELHI, Jan 24: Most Adani group shares extended their sharp falls on Monday as the Indian conglomerate's rebuttal of a U.S. short-seller's criticism failed to pacify investors, driving stock market losses for the companies to $66 billion over three days.

Flagship Adani Enterprises, which is facing a crucial test this week with a follow-on share offering, rose 4%, but was off initial gains of as much as 10% and significantly below the offer price.

Adani, led by Asia's richest man Gautam Adani, has locked horns with Hindenburg Research and on Sunday hit back at the short-seller's report of last week that flagged concerns about its debt levels and the use of tax havens. Adani said it complies with all local laws and had made the necessary regulatory disclosures.

Adani Transmission and Adani Total Gas plunged 20% each on Monday, while Adani Green Energy was down 18%. Adani Power and Adani Wilmar were down 5% each, while Adani Ports and Special Economic Zone slipped 0.5%.

Adani Enterprises' $2.5 billion secondary share sale entered its second day amid weak investor sentiment. The stock was trading at 2,892 rupees, far below the price band for the share sale of 3,112-3,276 rupees per share.

On Friday, the first day of the offer, the issue was subscribed 1% amid a broader fall in shares.

Initial data from stock exchanges on Monday showed Adani has now received bids for 687,840, or 1.5%, of the 45.5 million of shares on offer. The deal closes on Tuesday.

Foreign and domestic institutional investors, as well as mutual funds, have made no bids so far, according to the data.

"Retail participation is likely to have a shortfall with current market prices still trailing the offer price and sentiment taking a hit due to the Hindenburg controversy," said Hemang Jani, equity strategist at Motilal Oswal Financial Services.

"While there is a risk that the share sale does not go through, it will be crucial today to wait and see how institutional investors participate."

Adani Group said in a statement on Saturday that the sale remains on schedule at the planned issue price, even as sources said bankers of the country's largest secondary share sale were considering extending the timeline beyond Jan. 31, or tweaking the price due to the fall in its share price.

Indian regulations say the share offering must receive minimum subscription of 90%, and if it does not the issuer must refund the entire amount. Maybank Securities and Abu Dhabi Investment Authority are among investors who bid for the anchor portion of the issue.

Maybank said in a statement "there is no financial impact" as the subscription to Adani's offer was fully funded by client funds.

State-run insurance behemoth, Life Insurance Corporation (LIC), also invested, taking 5% of the anchor portion of around $734 million. It already holds a 4.23% stake in the flagship Adani firm, while its other group exposure includes a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.

On Saturday, index provider MSCI said it was seeking feedback from market participants on Adani and was monitoring the factors that "may impact the eligibility of those relevant securities" in MSCI indexes. There are at least six Adani Group companies in the MSCI India Index, with a cumulative weight of 4.31%.

"The stocks run the risk of getting excluded from the MSCI. This may not immediately happen, but those funds who have bought it based on the MSCI ... their investors will ask them to not continue with the holding and that's where this threat has emerged," said Deven Choksey, founder and managing director of KR Choksey Group.

The Hindenburg report has led to a massive wipe-out in seven listed companies of the Adani group since last week. As of Monday, the seven listed group entities have collectively lost $66 billion in market capitalisation since the report was released. Adani Total Gas lost the most, at $21 billion.

On Monday, responding to Adani's rebuttal, Hindenburg said the "response largely confirmed our findings and ignored our key questions."

In its response on Sunday, Adani highlighted its relationships with local and international banks and touted its access to diverse funding sources and structures, listing U.S. banks Citigroup and JPMorgan Chase & Co and European lenders such as BNP Paribas, Credit Suisse and Deutsche Bank.

But the continuing stock market meltdown is a dramatic setback for 60-year-old Adani. The school-dropout's stunning rise came with over 1,500% gains in some of his group stocks over three years, making him the world's third richest man before he slipped to rank eighth on the Forbes list on Monday.

Hindenburg's report said five of seven key listed Adani companies have reported current ratios, a measure of liquid assets minus near-term liabilities, of below 1 which it said suggested "a heightened short-term liquidity risk".

It said key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing" and that shares in seven Adani listed companies have an 85% downside due to what it called "sky-high valuations".

Adani's response on Sunday stated that over the past decade, its group companies have "consistently de-levered".

Adani Group Stocks' Fall Continues After Allegations By US Research Firm

NEW DELHI, Jan 27: The Adani group stocks continued to remain under pressure on Friday, falling up to 20 per cent in morning trade, after the US-based investment research firm Hindenburg Research made damaging allegations.

Shares of Adani Total Gas plummeted 19.65 per cent, Adani Transmission tumbled 19 per cent, Adani Green Energy plunged 15.50 per cent and Adani Enterprises tanked 6.19 per cent on the BSE.

Also, Adani Ports and Special Economic Zone fell 5.31 per cent, Adani Wilmar dipped 5 per cent and Adani Power declined 4.99 per cent.

In the broader market, the 30-share BSE benchmark plunged by 1,106 points or 1.84 per cent to trade at 59,098.37 in afternoon session due to heavy selling in financials, banking, oil and IT stocks.

Led by Tata Motors and Bajaj Auto, the BSE Auto index bucked the trend and was the only sectoral index to trade in the green in morning session.

Tata Motors was the lead gainer among Sensex shares rising by 5.14 per cent as the auto maker was back in black in the December quarter after two years.

Bajaj Auto jumped 6 per cent while the BSE Auto index was marginally up at 29,619.19.

The Adani Group on Thursday said it is examining legal options to take "punitive action" against Hindenburg Research for its "reckless" attempt to sabotage a mega share sale at the conglomerate's flagship firm - a statement that the US activist investor responded by saying it stands by its report that alleged "brazen" market manipulation and accounting fraud by the group.

"The maliciously mischievous, unresearched report published by Hindenburg Research on January 24, 2023, has adversely affected the Adani Group, our shareholders and investors. The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens," Adani Group's lead head Jatin Jalundhwala said in a statement.

The report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares, he said.

"We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders, and sabotage the FPO (Follow-on Public Offering) from Adani Enterprises," he said.

"We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research." Hindenburg, a US-based investment research firm that specialises in activist short-selling, said on Wednesday that its two-year investigation revealed that Adani Group has "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

Richest 1% own 40.5% of India's wealth, says new Oxfam report

DAVOS, Jan 16: India's top 1% owned more than 40.5% of its total wealth in 2021, according to a new report by Oxfam.

In 2022, the number of billionaires in the country increased to 166 from from 102 in 2020, the report said.

Meanwhile, it added that the poor in India "are unable to afford even basic necessities to survive".

The charity called on India's finance minister to levy a wealth tax on the ultra rich to tackle this "obscene" inequality.

The report - Survival of The Richest - was released as the World Economic Forum began in Davos, Switzerland.

The report highlighted the large disparity in wealth distribution in India, saying that more than 40% of the wealth created in the country from 2012 to 2021 had gone to just 1% of the population while only 3% had trickled down to the bottom 50%.

In 2022, the wealth of India's richest man Gautam Adani increased by 46%, while the combined wealth of India's 100 richest had touched $660bn.

In 2022, Adani was ranked the second richest person in the world on the Bloomberg's wealth index. He also topped the list of people whose wealth witnessed the maximum rise globally during the year.

Meanwhile, the country's poor and middle class were taxed more than the rich, Oxfam said.

Approximately 64% of the total goods and services tax (GST) in the country came from the bottom 50% of the population, while only 4% came from the top 10%, the report said.

"India is unfortunately on a fast track to becoming a country only for the rich," Oxfam India CEO Amitabh Behar said. "The country's marginalised - Dalits, Adivasis, Muslims, women and informal sector workers are continuing to suffer in a system which ensures the survival of the richest."

The rich, currently, benefited from reduced corporate taxes, tax exemptions and other incentives, the report added.

To correct this disparity, the charity asked the finance minister to implement progressive tax measures such as wealth tax in the upcoming budget.

A 2% tax on the entire wealth of India's billionaires would support the nutrition of the country's malnourished population for the next three years, the report said.

A 1% wealth tax could fund the National Health Mission, India's largest healthcare scheme for more than 1.5 years, it added.

Taxing the top 100 Indian billionaires at 2.5% or taxing the top 10 Indian billionaires at 5% would nearly cover the entire amount required to bring an estimated 150 million children back into school, Oxfam said.

"It's time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow 'trickling down' to everyone else," said Gabriela Bucher, the executive director of Oxfam International.

Taxing the super-rich was necessary for "reducing inequality and resuscitating democracy", she added.

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