India replaces France as world’s 6th biggest economy

India’s GDP amounted to $2.597 trillion at the end of last year, against $2.582 trillion for France

India has become the world’s sixth-biggest economy, pushing France into seventh place, according to updated World Bank figures for 2017. India’s gross domestic product (GDP) amounted to $2.597 trillion at the end of last year, against $2.582 trillion for France. India’s economy rebounded strongly from July 2017, after several quarters of slowdown blamed on economic policies pursued by Prime Minister Narendra Modi’s government.

India, with around 1.34 billion inhabitants, is poised to become the world’s most populous nation, whereas the French population stands at 67 million. This means that India’s per capita GDP continues to amount to just a fraction of that of France which is still roughly 20 times higher, according to World Bank figures.

Manufacturing and consumer spending were the main drivers of the Indian economy last year, after a slowdown blamed on the demonetisation of large banknotes that Modi imposed at the end of 2016, as well as a chaotic implementation of a new harmonised goods and service tax regime.

India has doubled its GDP within a decade and is expected to power ahead as a key economic engine in Asia, even as China slows down.

According to the International Monetary Fund, India is projected to generate growth of 7.4% this year and 7.8% in 2019, boosted by household spending and a tax reform. This compares to the world’s expected average growth of 3.9%.

The London-based Centre for Economics and Business Research, a consultancy, said at the end of last year that India would overtake both Britain and France this year in terms of GDP, and had a good chance to become the world’s third-biggest economy by 2032.

At the end of 2017, Britain was still the world’s fifth-biggest economy with a GDP of $2.622 trillion. The US is the world’s top economy, followed by China, Japan and Germany.

 

Qatar looks to Asia for investment in its new post-blockade era

– Yousuf Mohamed Al-Jaida, the CEO of the Qatar Financial Center, a business and financial center located in Doha, told CNBC that the country has moved to attract foreign investment by making it easier to get business visas and buy real estate.
– Qatar is looking for new partners, new alliances, so we are moving on, he said.

Qatar is looking to Asia for foreign investment in a “new era” for the country, following the blockade by a number of major Arab nations in June last year.

Yousuf Mohamed Al-Jaida, the CEO of the Qatar Financial Center, a business and financial center located in Doha, told CNBC Friday that the country has moved to attract foreign investment by making it easier to get business visas and buy real estate.

“Qatar is looking for new partners, new alliances, so we are moving on,” he said.

“Our presence in Hong Kong speaks a lot. We’re going to be doing a lot of more tours in Asia, Thailand, Vietnam, within the next two months,” he added.

Saudi Arabia, United Arab Emirates, Bahrain, and Egypt imposed trade and travel bans on Qatar in 2017, blaming the country for supporting terrorism.

The Qatar Financial Center, which aims to foster investment in Qatar, has been explaining to foreign investors that, after the deterioration of relations between Qatar and other Arabic countries, the country has been putting forward a slew of reforms to adapt to a “new reality.”

“The appetite is good, I think we have to do a lot more of awareness as to what the blockade means. What we are trying to pitch in terms of the blockade is that this is a new era for Qatar,” Al-Jaida said.

Source: CNBC

World Bank projects India’s FY19 GDP growth at 7.3%

The World Bank’s biannual publication, India Development Update: India’s Growth Story, expects the economy to clock a growth rate of 6.7 per cent in the current fiscal ending March 31.

The World Bank today projected India’s GDP growth at 7.3 per cent for the next financial year and accelerate further to 7.5 per cent in 2019-20.

The World Bank’s biannual publication, India Development Update: India’s Growth Story, expects the economy to clock a growth rate of 6.7 per cent in the current fiscal ending March 31.

The report, however, observed that a growth of over 8 per cent will require “continued reform and a widening of their scope” aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports.

“The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors — that is, to about 7.5 per cent a year,” the report said.

 In November 2016, the government had scrapped high value currency notes of Rs 500 and Rs 1,000 in a bid to check black money, among others.

Later, India implemented its biggest indirect tax reform — Goods and Services Tax (GST).

Both of these initiatives had impacted the economic activities in the country in short run.

India’s economic growth had slipped to a three year low of 5.7 per cent in April-June quarter of the current fiscal, though it recovered in the subsequent quarters.

The economy is expected to grow at 6.6 per cent in the current fiscal ending March 31, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1 per cent in 2016-17. The earlier estimate was 6.5 per cent.

The Economic Survey tabled in Parliament has projected a growth rate of 7 to 7.5 per cent in the 2018-19 financial year.

The World Bank report further said that accelerating the growth rate will also require continued integration into global economy.

It pitches for making growth more inclusive and enhancing the effectiveness of the Indian public sector.

 

Source: MoneyControl.com

Indian Economy seems to be on way to recovering from Demonetisation Disruptions, says IMF

India’s economy has expanded strongly in recent years, said Tao Zhang, Deputy Managing Director of IMF.

IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.

 

The Indian economy now seems to be on its way to recovering from disruptions caused by demonetisation and roll-out of goods and services tax, the IMF said today. At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems.

India’s economy has expanded strongly in recent years, thanks to macroeconomic policies that emphasise stability and efforts to tackle supply-side bottlenecks and structural reforms. Disruptions from demonetisation and the rollout of the goods and services tax (GST) did slow growth,” Tao Zhang, Deputy Managing Director of IMF, told PTI in an interview.

“However, with the economy expanding by 7.2 per cent in the latest quarter, India has regained the title of the fastest-growing major economy, Zhang said.

Calling this development a “welcome change”, Zhang said the growth prospects remain positive.

“That said, the Indian economy would benefit from further reforms, such as enhancing health and education, encouraging private and public investment, and improving the efficiency of the banking and financial system. This would support durable and inclusive growth and enable India to move toward the income levels of wealthier countries, the top IMF official said ahead of his visit to India.

Given the dominance of cash in everyday transactions in the Indian economy it was inevitable that demonetization would temporarily affect economic activity, said Zhang who is travelling to India and Bhutan from March 12 until March 20.
The rollout of the GST last year was a landmark accomplishment that can be expected to enhance the efficiency of intra-Indian movement of goods and services, create a common national market, enhance tax buoyancy, and boost GDP growth and job creation, he said.

 

Yet the complexities and glitches in GST implementation also resulted in short-term disruptions. As I mentioned earlier, the economy now seems to be on its way to recovering from those disruptions, Zhang said in response to a question.

When asked about the latest Indian budget, which many critics say is protectionist in nature, Zhang said IMF research indicates that tariffs are broadly contractionary, reducing output, investment, and employment.

Trade tariffs may give limited relief to industries and workers that directly compete with affected imports. However, they can raise costs to consumers and other businesses that use the protected products. Tariffs also would reduce incentives for businesses to compete and improve efficiency, he cautioned.

Since the opening of the economy starting in the early-1990s, India has benefitted from trade liberalization, he observed.

Further supply-side reforms aimed at improving the business climate could enhance these benefits, the top IMF official asserted.

Noting that the IMF and India have close relations, and the two have always been good partners, Zhang said his visit is a reflection of this partnership, as is the newest regional capacity development center, SARTTAC, based in New Delhi.

The center partners with India and its South Asian neighbors to build strong institutions and implement policies that promote growth and poverty reduction in the region, he said.

My visit is an opportunity to exchange views with the Indian authorities, senior RBI officials, and representatives from the Indian business community, civil society, and others, he said.

Zhang will also have a presentation on financial technology that will take place on Monday at the National Stock Exchange of India.

We will go over the latest trends in financial technology and their effects on the global economy and India, said the top IMF official.

Source: NDTV

Forex reserves jump by $168 million to $421 billion

The country’s foreign exchange reserves rose by USD 167.8 million to USD 420.758 billion in the week to March 2 on an increase in core currency assets, the Reserve Bank of India said today.

In the previous reporting week, the reserves had declined by USD 1.13 billion to USD 420.591 billion. The reserves had touched a life-time high of USD 421.914 billion on February 9.

 

It had crossed the USD 400-billion mark for the first time in the week to September 8 last year, but has been fluctuating since then. In the week to March 2, the foreign currency assets, a major component of the overall reserves, rose by USD 177.2 million to USD 395.642 billion, the apex bank said.

 

Expressed in the US dollar terms, the foreign currency assets include the effect of appreciation or depreciation of the non-US currencies such as the euro, the pound and the yen held in the reserves.

 

The value of gold reserves increased by USD 8.1 million to USD 21.522 billion, the central bank said.

 

The special drawing rights with the International Monetary Fund declined by USD 7.4 million to USD 1.529 billion. The country’s reserve position with IMF also declined by USD 10.1 million to USD 2.064 billion, the RBI said.

 

Source: Business Standard

 

How blockchain will fundamentally change our lives in future

 

Blockchain has the potential and can be implemented across diverse sectors such as banking, education, and health.

The use of the internet has undergone rapid evolution in a matter of a few decades.

In the 1990s, the internet was described as “a wide-area hypermedia information retrieval initiative aiming to give universal access to a large universe of documents” or simply put, ‘The Internet of Information’ which was primarily used to access data resources and services administered on the web browsers.

Back then, no one would have thought how it would fundamentally change our daily lives in the future. It has rapidly evolved from a platform to gather information to a space where we can shop, bank and communicate. The digital revolution has made the world realise the value of the internet and its implementations.

So, today we are gradually moving towards what Canadian strategist Don Tapscott calls ‘The Internet of Value’; that is the fountainhead of digital assets. Blockchain, which allows us to enable the exchange of any asset across the globe in real-time, ranging from stocks and bonds to music and art, is the next inevitable step in the global progress towards ‘The Internet of Value’.

Various applications of the internet have been made possible which are efficient like peer-to-peer money transfer, because internet reduces the transactional and communication cost to a bare minimum. This is the same force driving the new platforms that have emerged to deliver goods and services at levels of efficiency previously unimaginable, and blockchain is leading the revolution in redefining the new-age internet.

Like a traditional ledger, blockchain is essentially a record of transactions. These transactions can be any movement of money, goods or secure data — for example, a purchase at a supermarket, or the assignment of an Aadhar number. It works in three basic steps. First, it gathers data that the user has provided in forms of smart contracts, transactions IDs. Second, it orders the received data into blocks and finally chains them together securely using cryptography making it decentralised and accessible via any computer/mobile device across the network.

Now the question here is why do we need it? What is it that will change the way groceries are bought, stocks are purchased, money is transferred, bills are paid, and land deeds are made? The answer possibly can be the demand for trust and security emerging from both people and enterprises alike. Blockchain best serves these purposes as the trust factor is native to the medium. For example, if you are transferring money online to your friend, then your medium becomes the internet and to secure your transfer, a clever programming code is written. The same concept is applied by blockchain, but the security is made more secure by cryptography.

Blockchain has the potential and can be implemented across diverse sectors such as banking, education, and health. For instance, we keep our savings, assets and cash with banks because they are trustworthy and secure. However, their data is centralised, making them quite prone to cybercriminals that can bring the entire banking system to a halt. Now consider a person working abroad who wants to send a remittance to his family back home but has to encounter multiple clearances before his family receives it. With blockchain technology, the concept of crypto currency comes into picture, thus resulting in an open-access registry of monetary flows which makes the intermediation of financial institutions unnecessary and even costs less.

Second, in the field of healthcare, while big data analytics and artificial intelligence are simplifying healthcare delivery by smartly diagnosing the diseases from the patterns of numerous plugged-in electrocardiograms, blockchain is turning out to be a perfect platform for recording the medical attention of a patient and identifying a trend from the data recorded. Consider health card: A database which can be perceived as your health identity as it carries your entire medical history. Such technologies can find effective application in reducing information asymmetries within the healthcare and insurance markets by providing the most accurate data on patients.

Finally, blockchain can reorient the education system by delivering academic transparency. It can build an e-portfolio of academic credentials which has your test scores since the day you entered school. Paying for school fee in crypto currency — which is decentralised — from anywhere around the world on a secured network is commendable. Hence, this multi-trillion-dollar industry of education is indeed revolutionising.

Also, if implemented in government operations, blockchain will help break down barriers built from bureaucracy and corruption by providing a means to bypass existing power structures. It could be used to transform the way charities are created and regulated. By implementing a transparent system of transactions that include deposits of cash, transfers of donation and expenses spending will bring about a paradigm shift on how rules are enforced for these organisations.

Moreover, this technology has the competence to revamp the present system by automating manual processes, eradicating frauds and controlling the issues for authorisation. Its implementation across diverse sectors can be a solution to the most foundational problems of mankind. Hence, blockchain could be the perfect platform to transform a knowledge-driven economy into a digital-inclusive society.

Private equity investors bring in deals worth $983 mn in January: Thornton

January was dominated by investments in start-ups which contributed to 52% of total investment volumes

Private equity (PE) investors announced deals worth $983 million in January, a 23 per cent rise in value terms over last year, driven by big ticket transactions, says a Grant Thornton report.

According to the assurance, tax and advisory firm, in January, there were 84 PE deals worth $983 million, against 81 such transactions worth $796 million in January 2017.

“Private equity deals recorded 4 per cent increase in deal volumes and 23 per cent increase in deal value in January 2018 as compared to January 2017,” said Pankaj Chopda Director at Grant Thornton India LLP.

January was dominated by investments in start-ups which contributed to 52 per cent of total investment volumes. On the other hand, energy & natural resources and real estate sectors witnessed big-ticket PE investment over $100 million together capturing 39 per cent of total PE deal values.

Altico Capital’s investment of $195 million across five realty projects in Hyderabad and Pune was the top PE deal in January.

Other major transactions include Canada Pension Plan Investment Board’s 6 per cent stake acquisition in ReNew Power Ventures for $144 million and Warburg Pincus and SAIF Partners’ $50 million investment in Rivigo Services.

Going forward, the PE deal outlook looks bullish especially for the start-up sector.

“Increasing customer penetration in online transactions and increasing solutions to simplify online transactions offered by start-ups will attract interest in start-ups engaged in retail, fintech, foodtech, on demand services and travel and logistics,” Chopda said.

“Government reforms such as RERA, focus on cleantech and on increasing digital financial transactions will drive the momentum in banking and financial, real estate and energy and natural resources.

India-specific strategies by global and already present PE firms and funds raised by new players will act as catalyst for PE transactions,” he added.

Source: Business Standard