Current Affairs January 2018 - Economic

1 - FDI equity inflow of US$6492.19 million in the food processing sector

According to Department of Industrial Policy & Promotion, there has been FDI equity inflow of US$6492.19 million in the food processing sector during 2010-11 to 2016-17. As per the latest survey, the total invested capital by the registered food processing units was at Rs.368,43,371 lakhs and the number of registered food processing units has increased from 35,838 in 2010-11 to 38,603 in 2014-15.

State-wise Invested Capital in Registered Food Processing Units by 2014-15

2 - IMF reported India as 2^nd fastest growing major economy in 2017 in world

IMF reported India as the fastest growing major economy in 2016 and second fastest growing major economy in 2017 in the world. Government has taken various initiatives to boost the growth of the economy which include fillip to manufacturing, concrete measures for transport and power sectors as well as other urban and rural infrastructure and special package for textile industry.

3 - 8 core sectors grew by 6.8% in Nov 2017

Eight core sectors growth hits at a fastest pace in more than a year at 6.8% in November 2017 on account of robust performance in segments like refinery, steel and cement.

According to the data released by the commerce and industry ministry, eight industries coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity had witnessed a growth of 3.2% in November 2016. A healthy growth in key sectors will have positive implications on the Index of Industrial Production (IIP) as these eight segments account for about 41% of the total factory output.

4 - First advance estimates of National Income 2017-18

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation released the first advance estimates of national income at constant (2011-12) and current prices, for the financial year 2017-18. Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2017-18 is likely to attain a level of Rs 129.85 lakh crore. The growth in GDP during 2017-18 is estimated at 6.5% as compared to the growth rate of 7.1% in 2016-17.

GDP is likely to attain a level of Rs 166.28 lakh crore and per capita net national income to be Rs 111,782.

5 - Growth likely to be higher than CSO estimate of 2.1%

Agriculture Ministry reported that India’s agriculture sector is expected to grow higher than projected 2.1% growth by the Central Statistical Office for the current fiscal, following better rabi crop prospects. CSO reported that agriculture, forestry and fishing is likely to slow a growth of 2.1% in the current fiscal from 4.9% in the preceding year.

6 - GDP growth during current fiscal to be 6.5%

The Growth in GDP during 2017-18 has been estimated at 6.5% as compared to 7.1% in 2016-17. The growth in manufacturing sector is expected to decelerate to 4.6% this fiscal, down from 7.9% in 2016-17.

The per capita income in real terms (at 2011-12 prices) during 2017-18 is likely to attain a level of Rs 86660 as compared to Rs 82269 for the year 2016-17. The growth rate in per capita income is estimated at 5.3% during 2017-18, as against 5.7% in the previous year.

7 - India's factory production in November rises by 8%

Industrial production growth rose to 8.4% in November 2017 on the back of robust performance of manufacturing and capital goods sectors. The factory output, measured in terms of Index of Industrial Production (IIP) grew 5.1% in November 2016.

Manufacturing sector recorded an impressive growth of 10.2% in November, the growth of mining sector production was 1.1% and Electricity generation growth was 3.9%. Pharmaceuticals clocked the highest growth of 39.5%, followed by 29.1% in computer, electronic and optical products and 22.6% in the automobile segment.

8 - 2018 Global Economics Prospect unveiled India’s GDP at 7.3% for 2018

2018 Global Economics Prospect was released by World Bank. World Bank projected India’s growth rate at 7.3% in 2018 and 7.5% in 2019 due to impact of demonetization and GST. It has also been stated in the report that India’s growth potential will be 7% in the upcoming 10 years. Global growth reached 3% in 2017, its strongest rate since 2011 and is expected to reach up to 3.1% in 2018.

The global outlook is still subject to downside risks due to geopolitical tensions. Growth in low-income countries (LICs) is projected to rise to 5.4 percent in 2018.

9 - Direct Tax Collections for F.Y. 2017-2018 show Growth of 18.7% up to 15^th January, 2018

The provisional figures of Direct Tax collections up to 15^th January, 2018 show that net collections are at Rs. 6.89 lakh crore which is 18.7% higher than the net collections for the corresponding period of last year.

The net Direct Tax collections represent 70.3% of the total Budget Estimates of Direct Taxes for F.Y. 2017-18 (Rs. 9.8 lakh crore). Gross collections (before adjusting for refunds) have increased by 13.5% to Rs. 8.11 lakh crore during April, 2017 to 15^th January, 2018.

10 - Foreign Exchange Earnings (FEEs) through Tourism (in Rs. terms) for Dec 2017

• FEEs during the month of December 2017 were Rs. 19,514 crore as compared to Rs. 16,558 crore in December 2016 and Rs. 14,152 crore in December 2015.

• The growth rate in FEEs in rupee terms in December 2017 over December 2016 has increased to 17.9%, compared to 17.0% in December 2016 over December 2015.

• FEEs during 2017 were Rs. 1,80,379 crore with a growth of 17.0% over 2016. Whereas, the FEEs during 2016 were Rs.1,54,146 crore with a growth of 14.0% over 2015.

11 - Foreign Exchange Earnings (FEEs) through Tourism (in US $ terms) for Dec 2017

• FEEs in US$ terms during the month of December 2017 were US$ 3.038 billion as compared to FEEs of US$ 2.439 billion during the month of December 2016 and US$ 2.126 billion in December 2015.

• The growth rate in FEEs in US$ terms in December 2017 over December 2016 has increased to 24.6% compared to the growth of 14.7% in December 2016 over December 2015.

• FEEs during 2017 were US$ 27.693 billion with a growth of 20.8% over 2016. The FEEs during 2016 were US$ 22.923 billion with a growth of 8.8% over 2015.

12 - Government lowered additional borrowings to Rs 20,000 crore in FY18

The government has lowered the additional borrowing requirement for the current fiscal to Rs 20,000 crore from Rs 50,000 crore estimated earlier.

The government had earlier in December 2017 had said that it would make additional borrowing of Rs 50,000 crore this fiscal through dated securities. However, there would have been no change in the net borrowing as envisaged in the budget. The government had pegged the fiscal deficit target of Rs 3.2 per cent of the GDP for the current fiscal.

13 - Exports rise more than 12% in December 2017

The overall goods exports (year-on-year) has risen by 12.36% to $27.03 billion in December 2017 on account of increase in exports of engineering goods and petroleum products. Total exports for the period April-December 2017-18 were $223.51 billion.

Also, import a have risen by 21.1% to $41.91 billion in December 2017. This widened the trade deficit to $14.88 billion in December 2017 compared to $10.54 billion in December 2016. Overall imports for the period April-December 2017-18 were valued at $338.36 billion.

14 - Indian Oil enters into technology tie-up with Israeli companies

Indian Oil Corporation (IOC) has signed Letters of Intent (LoI) with Phinergy, an Israeli start-up company, and YEDA, a technology company from Weizmann Research Institute in Israel.

The Letter of Intent with M/s. Phinergy enables Indian Oil to work on adoption of advanced energy systems for the Indian market for both mobility and stationary industrial applications. Letter of Intent signed with YEDA (Weizmann Institute) will pave the way for research collaboration between both the organisations for developing solar to green fuel technologies through concentrated solar thermal route.

15 - India to become fastest growing large economy in 2018

According to a Sanctum Wealth Management report, India will become the fastest growing large economy in the world, eclipsing China, in 2018 and the country's equity market will jump to become the fifth largest in the world.

According to the report, at a time when developed economies are cheering 2-3% growth, India is focused on breaching 7.5%. Domestic mutual funds bought equities worth 15.3 billion US Dollar against 8 billion US Dollar by foreign investors in 2017.

16 - India Ratings and Research project 7.1% growth in 2018-19

India Ratings and Research has projected the economic growth of India to improve to 7.1% in 2018-19 as compared to 6.5% during 2017-18 supported by robust consumption demand and low commodity prices.

The gradual growth will be buoyed by structural reforms like GST and Insolvency and Bankruptcy Code (IBC) in place. ADB and IMF have predicted the growth rate for 2018-19 to be at 7.3% and 7.4% respectively.

17 - India to grow at 7.4% in 2018: IMF

The International Monetary Fund (IMF) has projected a growth of 7.4% for India in 2018 as against China's 6.8%, making it the fastest growing country among the emerging economies.

Due to demonetisation and implementation of the Goods and Services Tax (GST), India’s economy slowed down a little bit to 6.7% in 2016. The IMF has projected a 7.8% growth rate for India in 2019. China, during the same period is expected to grow at 6.6% and 6.4%.

18 - Government collected Rs 86,703 cr under GST in December 2017

Government has collected Rs 86,703 crore under GST in December 2017. One crore taxpayers have been registered under GST so far. Of them over 17 lakh are Composition Dealers which are required to file returns every quarter.

According to the Ministry of Finance, over 56 lakh GSTR 3B returns have been filed for the month of December till yesterday. 9.25 lakh returns were filed by Composition Dealers, paying a sum of over 421 crore rupees during October- December quarter.

19 - Key points of Economic Survey 2017-18

According to the Economic Survey 2017-18, India's gross domestic product (GDP) will grow by 7% to 7.5% in 2018-19.

• The average retail inflation has declined to a six-year low of 3.3%.
• The Agriculture growth in FY18 likely to be at 2.1%
• Industry growth for FY18 likely to be 4.4%
• Services growth for FY18 likely to be at 8.3%
• GST tax payers increased by 50%
• Export growth is peged at 12.1%
• India will need $4.5 trillion investment in infrastructure by 2040
• Current account deficit expected to average 1.5-2% of the GDP this fiscal

20 - India's crude steel production rises 6.2% to 101.4 MT in 2017

India has overtaken the US to become the world's third-largest steel producer. Country's crude steel production grew by 6.2% to 101.4 million tonnes, MT, in 2017 compared to 95.5 MT in the previous year.

Japan, the second largest global steel producer, witnessed a negative growth as steel output declined by 0.1% to 104.7 MT in 2017 from 104.8 MT in 2016. China remained the world leader by producing 831.7 MT in 2017, up 5.7% from 786.9 MT in the year-ago period.

21 - HSBC forecasted India's GDP Growth at 6.5% in FY18 and 7.6% in FY20

HSBC forecasted India's GDP Growth at 6.5% in FY18 and 7.6% in FY20 due to demonetization and implementation of Goods and Services Tax (GST). HSBC has forecasted that RBI will keep the repo rate on hold and reverse repo at 5.75 per cent while raising the inflation forecast for the remainder of 2017-18 to 4.3-4.7 per cent. Inflation is forecasted to be low down to 4%.

HSBC Holdings plc is a British multinational banking and financial services holding company, tracing its origin to a Hong in Hong Kong.