• India will continue to hold bilateral discussions with the 15 countries it is negotiating the
    mega Regional Comprehensive Economic Partnership (RCEP) agreement with,
    including China and the 10-country ASEAN, to try and ensure that the pact, if
    implemented, would result in substantial market access for its goods and services.
  • The country will need to grow by 9% every year for five years continuously and raise
    the aggregate investment rate to 38% of GDP to achieve Prime Minister Narendra
    Modi’s target of turning India into a $5-trillion economy, EY has said.
  • In an alternate scenario, assuming India grows by a projected 7% in the current fiscal
    year ending March 31, 2020, the size of the economy will grow to $3 trillion from $2.7
    trillion in the previous year.
  • Some of the assumptions made by EY are as follows:
    Growth rate at 9% in each of the five subsequent years, expected to take the size of
    the economy to $3.3 trillion in FY21, $3.6 trillion in FY22, $4.1 trillion in FY23, $4.5
    trillion in FY24 and $5 trillion in FY25.
    An inflation rate of 4%, the target inflation rate according to the Monetary Policy
    Framework, a real growth rate close to 9% would be required to increase the size of the
    Indian economy to $5 trillion by FY25. This implies a nominal growth rate of 13% and
    an average annual depreciation of the rupee viz-a-vis the $ at 2%.
  • However, raising the growth rate to 9% in FY21 would require uplifting the investment
    rate to close to 38% of GDP as against 31.3% in FY19.
    If the inflation rate is lower than 4% on an average and if the exchange rate
    depreciation is higher than 2% per annum, reaching the size of $5 trillion would be
    delayed even beyond these target years.
  • While the Central Government plays a four-fold role in determining the overall
    investment rate through its budgetary capital expenditure, spending through PSUs,
    policy initiatives inducing private investments and coordination with state governments,
    the Centre’s share in the country’s aggregate investment was quite small at 1.6% of
    GDP in FY19.
  • “Furthermore, if the Central Government can successfully reduce its revenue deficit,
    there would be room for higher capital expenditure with the same fiscal deficit. It can
    also induce additional investment through the CPSEs while keeping in mind, the overall
    constraint of resources in the form of savings in the system.”, India to continue engaging bilaterally with RCEP members for favourable deal
    The Hindu, Business Line, August 5, 2019
    https://www.thehindubusinessline.com/todays-paper/tp-news/article28818119.ece
  • India will continue to hold bilateral discussions with the 15 countries it is negotiating the
    mega Regional Comprehensive Economic Partnership (RCEP) agreement with,
    including China and the 10-country ASEAN, to try and ensure that the pact, if
    implemented, would result in substantial market access for its goods and services.
  • Dr. P Anbalagan, IAS, CEO, MIDC suggested that Maharashtra is the leading state for
    Industrial Cluster Development along the special projects declared by central/state
    government such as Maharashtra Samruddhi Mahamarg, Delhi-Mumbai Industrial
    corridor (DMIC), Sagarmala and Bharatmala etc. Further, there will be scheme to
    develop specific cluster for Micro & Small Industries in the state.
  • The government’s fiscal deficit touched Rs 4.32 trillion for the June quarter, which is
    61.4% of the budget estimate for 2019-20. The fiscal deficit was 68.7% of 2018-19
    budget estimate in the year-ago period.
  • As per data released by the Controller General of Accounts (CGA), the fiscal deficit was
    Rs 4.32 trillion at June-end.
  • To help India maximise the benefits from the on-going tariff war between the US andChina, Commerce and Industry Minister Piyush Goyal has asked exporters to flagconcerns related to availability of land and labour, setting up of common effluenttreatment plants, cluster development and necessary logistics support in ports, airportsand customs.
  • Poor demand for the heavy commercial vehicle segment, which has witnessed
    subdued sales volumes since November 2018, is likely to linger for a longer period as
    the trucking sector will be up against a formidable challenger – Indian Railways’
    Dedicated Freight Corridors (DFCs) – in the years to come.
  • One commissioned, the DFC’s will offer freight rates that would be up to 45% cheaper
    compared with roads, and the time taken for delivery will almost be the same, further
    impacting the demand for heavy vehicles, whose demand is subdued on account of
    rise in prices and the revised axle load norms.