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Among developing markets/Asia, India's relative condition stands out. According to IMF data, India will be the fastest-growing Asian economy in real terms in 2022, and the only Asian country to expand in double digits nominally.
According to the paper, India's development momentum is partially stronger because it has taken a more open economy approach to Covid than China, which has taken a "zero Covid" policy.
According to Jefferies, the global economic slowdown, aided by a possible China slowdown through 2022, presents a perfect situation for India. Global benchmark prices for petroleum (9%), steel (26%), and coking coal (47%), for example, have already fallen from recent highs. Because India is a net importer of several commodities, lower pricing trends benefit India's imports, lowering inflation and putting downward pressure on the INR.
Domestic rate hikes will most likely be modest as a result of this; South Korea, Brazil, and Russia are among the nations that have already begun to raise rates. India has thus far resisted hiking its policy rates, however this is expected to change in 1HCY22. According to Jefferies, an analysis of six major components of the economic cycle reveals that circumstances are ideal for the commencement of a big cyclical upturn in India. Housing, nonperforming loans, and corporate profitability cycles all turned positive in 2021, and these cycles have historically lasted 6-10 years.
Corporate leverage is at a cyclical low, allowing corporations to take large investment risks. The larger capex cycle has not yet flipped, but it normally lags behind the housing cycle. "Interest rates will most certainly rise, but this will not be a concern in the early stages of the cycle. In FY23, we anticipate India's GDP to expand at least 7% "According to Jeffries.
In India, the housing cycle lasts 6-8 years, and after a dip in 2013, the cycle has clearly flipped in 2021. Inventories have fallen to eight-year lows as new product releases have yet to catch up with rapidly expanding sales, which should lead to price hikes and a continuation of the cycle. The other significant change is in bank balance sheets, where gross nonperforming loans (NPLs) have decreased from 12 percent in March 2018 to 7% presently, and net nonperforming loans (NPLs) have decreased by 59 percent, despite a provisioning increase. As a result, banks' ability to lend has increased significantly.
Over the period FY11-FY20, corporate profit growth was abysmal, with a CAGR of only 0.4 percent. With a 51% increase in earnings from FY20 to FY22, the tide has turned.
Also read: Indian Economy in “Transition”
According to Propequity, home sales in the Top-7 cities have surpassed 400 million square feet for the first time since 2013. We think that housing demand will remain robust in 2022, potentially increasing by 10% or more year over year. The early recovery was fueled by a surge in premium and luxury home sales. However, as India's economic recovery deepens and non-salaried sector jobs return, Jefferies believes that demand for inexpensive homes would increase. (IANS/PR)
(Keywords: India, economic supercycle, 2021, 2022)
Union Finance Minister Nirmala Sitharaman on Saturday hailed UP chief minister Yogi Adityanath for taking the state to the path of development, saying that Uttar Pradesh will soon emerge as a shining example for others in time to come.
Sitharaman was on a trip to Uttar Pradesh during which she asserted that in the last four to five years a series of world-class infrastructure projects such as Purvanchal Expressway, Bundelkhand Expressway, Gorakhpur and Ballia Link Expressway and now Ganga Expressway have been initiated in the state which will take the state on the road to a 'new' Uttar Pradesh.
"The thought behind the Prime Minister's Vocal for Local is clearly reflected in the One District One Product (ODOP) scheme here," she added.
Further referring to the Uttar Pradesh Defence Corridor, she said that the state, which was known for agriculture and MSME sectors, not only showed interest in undertaking such big and important projects, but has also been executing them successfully.
Terming it as a grand success, Sitharaman credited it to the 'visionary' duo of Prime Minister Narendra Modi and Chief Minister Yogi Adityanath.
The Finance Minister was giving her views in a meeting organised for Ganga Expressway at Indira Gandhi Pratishthan on Saturday.
Appreciating the Yogi government for giving 'meaningful' direction to the government policies, she said that the promptness and success with which the schemes of the central government have been implemented in the state is an example for others.
The meeting, chaired by Chief Minister Yogi Adityanath, was to find ways how to raise finances for the Ganga Expressway project.
In the meeting, Managing Director & CEO, Punjab National Bank, S.S. Mallikarjuna Rao handed over the Rs 5,100 crore loan sanction letter to the state government for the project.
The Chief Minister said that the Ganga Expressway, which will be built from Meerut to Prayagraj, would be the backbone of the Uttar Pradesh economy.
Yogi said that the Finance Minister, in her Union Budget 2021-22 speech, had articulated the broad concept of National Infrastructure Pipeline and National Monetisation Pipeline, emphasising on the development of necessary infrastructure for coordinated development in different parts of the country.
"In order to mobilize the required financial resources for the infrastructure projects, the Union Finance Minister had suggested the method of monetization. Taking the concept forward, the Uttar Pradesh government has finalised the process of securitisation based loans from banks as a part of raising finances for Ganga Expressway," the Chief Minister noted.
State Finance Minister Suresh Khanna said that the state government has added many new dimensions in the field of all-round industrial development of the state in the last four years.
Keywords: UP, economy, sitharaman, yogi adityanath
Think Change Forum, an independent think tank dedicated to seeking solutions for navigating the post-pandemic world, today announced a new initiative aimed at bringing together some of the most reputed thinkers for developing new ideas to reboot the Indian economy.
Called, ‘Ideas for Rebooting Indian Economy in the Post Pandemic World’, this initiative aims at holistically looking at select areas of the economy which can create a lighthouse effect and accelerate the pace of growth for the country.
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The world is still recovering from the aftermaths of the Covid pandemic. It will take an entire decade for Governments across the world to succeed in rebuilding their economies to the desired levels. India however is positioned at an opportune fulcrum, to seize a larger role in this redevelopment, provided it takes the right steps quickly. It is in this context that the Forum’s dialogue series aims to focus on specific areas which can have a catalyzing effect on the overall economy.
The first event of the series was a high-powered panel discussion based on analyst and commentator Sanjaya Baru’s discourse, ‘The Secession of the Successful’. The inaugural webinar, which included scholars such as Baru, economist and NIPFP professor, Ila Patnaik; International Relations expert Amitabh Mattoo; and, the noted historian of science Deepak Kumar, dwelled on the issue of the flight of talent and wealth capital out of India and how this challenge needs to be tackled. The speakers were unanimous in their opinion that arresting the outflow of both these types of capital was absolutely necessary to realize the dream of a self-reliant or ‘Aatmanirbhar Bharat’.
The thrust of the deliberations centered around two key issues. One, the wealthy, intellectual, human resource flight from India to the nearby as well as the traditionally ‘advanced’ nations, and Two, the money capital flight by way of non-residents and tax-haven seekers who are happy to stay abroad while investing or working in India. The classical drain of resources, especially humans, was due to poverty and lack of opportunities here. Today, well to do, educated individuals have no qualms un-packing and leaving for greener pastures. The peculiar issue of HNW Indians going in for dual-passports and investing outside India for better returns was also highlighted. (IANS/SP)
The VUCA — Volatile, Uncertain, Complex, Ambiguous — world we live in has become an all-pervasive mega-trend, dramatically changing the lives of individuals, business models of enterprises, and the Indian economy. It requires unlearning the old rules and learning the new or losing unrecoverable ground, says Nitin Seth, an accomplished industry leader with a unique combination of experiences as a global manager, entrepreneur, and management consultant, who has distilled his experiences into a framework of seven building blocks necessary for successful digital transformation.
Most enterprises have embarked on some variation of digital transformation but their impact often falls short of expectations by 70 percent as “the core issue is that enterprises have not recognized how many business fundamentals have changed in the Digital Age and continue to take their existing business models, infrastructure, and approaches and apply it to digital age problems and opportunities”, Seth writes in the seminal book, “Winning in the Digital Age” (Penguin Enterprise).
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“It is clear if you apply old world formulas to new world situations, your outcomes can only be sub-optimal,” maintains Seth, who held top management positions with McKinsey (two spells), Fidelity, and Flipkart before founding Incedo Inc., a high-growth technology services firm focused on Digital Transformation and Analytics.
“Incremental thinking no longer works, If you don’t think differently, someone else will cannibalize your business or your skillset. Therefore, we all need a new mindset and set of principles to succeed in this digitally disrupted world or risk losing ground,” Seth adds.
This means coping with an “unprecedented velocity of change” that includes technology disruption, changing expectations of customers who are digitally savvy and demand high-quality experiences and solutions, an explosion of data from multiple touchpoints, geopolitical uncertainty, and shortening business and product cycles. Thus, what is required are drastic changes in the educational system to prepare the generation to enter the job market and reskilling those already in the workforce.
“For learning and development overall, I believe there are four key shifts that need to occur as a result of the power of Digital Technology.
“First, a shift from one-size-fits-all learning, to a high degree of personalization.
“Second, there has to be a shift from standard predetermined push-based learning sessions to bite-sized, self-directed learning lessons.
“Third, learning needs to move from a classroom style to be multi-dimensional and channel-agnostic, which involves innovative approaches so that digital natives are engaged.
“Fourth, a move from hard skills focus to a soft skills focus. Shifting learning and development in these four ways will ensure more individuals are prepared for 21st-century jobs which will require lifetime learning skills,” Seth explained.
What then, are his seven mantras?
* New Rules of Business at three different levels: the general level of the VUCA world, the digital transformation level, and the level of specific technical elements of digital.
* Industry Maturity Curves: The protracted work-from-home situation resulting from the Covid-19 pandemic has given a significant boost to digital penetration in every industry we are operating in.
* Digital Technologies: These are not independent but interconnected; enterprises realize transformative value when these digital technological building blocks are connected end-to-end. Data is the fulcrum of digital. It can trigger a virtuous cycle; equally, data challenges can quickly escalate into a vicious cycle.
* Global Delivery Model: Every enterprise in the digital age has to be a global enterprise. Enterprises can develop this global footprint either by partnering with service companies or by establishing their own dedicated technology operational centers. A Global Delivery Centre covers both these entities.
* Organisational Transformation: This is probably the most important enabler of digital transformation. In addition to culture, there are at least seven organizational capabilities that are key to sustained success in the digital age ï¿½ proprietary knowledge building and sharing, innovation, agility, learning, diversity, change management, and enabling functions like HR and finance.
* Entrepreneurial Leadership: In an era of unprecedented uncertainty and change, traditional tools of management like structure, strategy, planning, and policies do not just lose effectiveness, but can also become a roadblock. Instead, you need vision, inspiration, intuition, collaboration, and the ability to constantly adapt. ï¿½Managers to Leaders’ has become an absolute imperative in the digital age.
* Next Generation Talent: Prior experience and successful track records are less relevant than before because you need to unlearn the old and learn the new rules of the game. Prominent among the requirements are continuous learning, creativity and innovation, tech DNA, agility, management of duality, and spiritual and ethical balance.
“My advice for young professionals is that digital is a great equalizer, it presents discontinuous opportunities for them. There are vast opportunities for young professionals and this should liberate them to explore, find and live the unique purpose of their own lives. They should consider being an entrepreneur since digital disruption is creating a host of new business opportunities and risks are relatively low with high returns. Finally, they need to build strong problem-solving and decision-making skills.
“The VUCA world we are living in is characterized by high volatility and complexity. So, problem-solving and effective decision-making skills have become more important than ever before. These are foundational skills that every young professional should build in the digital age, irrespective of his or her choice of career,” Seth explained.
Finally, 21st-century leadership more than ever is about managing duality. “The Digital Age poses many contradictions that leaders need to respond to – vision/strategy versus execution, growth versus profitability, short-term versus long-term, customer versus employees, data versus intuition, man versus machine, and many more. It is not enough to find the trade-offs on these complementary values, but leaders need to find win-win solutions. This increased need to manage duality is an important expectation of leaders in the Digital Age,” he maintained.
What next? What’s his next project?
“I am now writing my next book on Spirituality and Leadership that is a necessity to win in the Digital Age. With so much chaos and disconnectedness in this Digital Age, being centered and connected with the inner-self is crucial to realizing purpose. Finding the balance between Spirituality and Materialism is an often ignored key to succeed and must be found by each one of us,” Seth concluded. (IANS/SP)