Weekly News Roundup at 10:00 am on 17th March 2024

India’s GDP grew 8.4 percent in the December quarter of FY24, according to the official data released by the Ministry of Statistics and Programme Implementation on Thursday. The Statistics Ministry’s second advance estimates indicate a GDP growth of 7.6%, surpassing the initial estimate of 7.3% released before the Union Budget in January. On the back of good performance by the sectors such as construction, mining & quarrying, and manufacturing, India’s economic growth has witnessed significant upswing. Meanwhile, the growth of eight key infrastructure sectors decelerated to a 15-month low of 3.6 percent in January, primarily due to the underperformance of sectors such as refinery products, fertilizer, steel, and electricity.

Meanwhile, the Centre’s fiscal deficit came in at 63.6% of the revised estimate in the first ten months of the current financial year compared with 67.8% of the respective target in the year-ago period, largely due to a decline in spending in January while tax revenues remained on track. While net tax revenues rose by 11.3% on year in April-January of FY24, exceeding the required growth rate of 10.8% to achieve the revised estimate of Rs 23.2 trillion, non-tax revenues expanded by 46% to Rs 3.38 trillion on the back of the robust Reserve Bank of India dividend. The capital expenditure growth has come in at 26.5% on-year expansion in April-January FY24, a bit lower than the required growth rate of 29%.

Moving on. Foreign direct investment inflows in India declined 13 percent to $ 32.03 billion in April-December 2023, dragged down by lower infusion in computer hardware and software, telecom, auto, and pharma sectors, according to the latest government data. FDI inflows stood at $ 36.74 billion during the corresponding nine months of the preceding fiscal. Inflows during the October-December quarter of the current fiscal, however, rose by 18 percent to $ 11.6 billion as against $ 9.83 billion during the same quarter of 2022-23. The total FDI — which includes equity inflows, reinvested earnings, and other capital — declined by about 7 percent to $ 51.5 billion during the period under review against $ 55.27 billion in April-December 2022, the data from the DPIIT showed.

In some more economy news, amidst the projection of a record wheat output, the government this week increased the grain procurement target for the 2024-25 season, that is April-June, to around 30 – 32 million tonne against 26.2 mt purchased from the farmers under minimum support price operations. Sources told Financial Express that following the meeting of state food secretaries of the key wheat-producing states, the government decided to set higher purchase under MSP operations which is expected to bolster the Food Corporation of India’s stock which has plummeted to eight year-low currently. Procurement in Punjab and Madhya Pradesh, two major contributors to the central pool wheat stock, is currently estimated at 13 mt and 80 mt respectively for next marketing season

Over to industry. Revenues accruing to IT firms from top clients shrunk during the October-December quarter. While the decline was for all the firms if compared on a year-on-year basis, it was for about half of the firms on a sequential basis. For instance, Infosys’ top 25 clients contributed about 35.3% in the third quarter of FY23, but contributed about 33.7% in same quarter this fiscal. Similarly, Wipro’s top 10 clients contributed 21.2% a year earlier, but the same came down to 20.5% in Q3 of FY24. Their contribution to Wipro’s revenue also declined sequentially. Wipro recently stated that it is rationalising its total number of clients in an effort to boost margins and even letting go some of the low profitable work.

The Union cabinet this week gave its nod for the amendment of the Second Schedule to the Mines and Minerals (Development and Regulation) Act, 1957, to specify the royalty rates for 12 critical and strategic minerals. The 12 minerals include Beryllium, Cadmium, Cobalt, Gallium, and various others that make use in sectors like defense, electronics, and renewable energy.With the amendment, royalty rates for all 24 critical and strategic minerals have now been rationalised. The government had earlier notified royalty rates for Glauconite, Potash, Molybdenum and Platinum in 2022 and then for Lithium, Niobium, and Rare Earth Elements in October 2023. The approval will further enable the government to auction blocks for these 12 minerals for the first time in the country.

Lastly, the auto sector. Royal Enfield launched the new V4 Explorer riding jacket this week. Priced at Rs 11,500, the new Explorer V4 is available in three colours – Black, Neon Green, and Grey. Enfield claims the new jacket is a significant upgrade from its predecessor– Explorer V3 with a host of enhanced features that redefine the touring jacket experience. The evolution in design is immediately apparent with the Explorer V4 boasting a more vibrant and colourful aesthetic. On the performance front, the upgrade includes D3O Level 2 protectors at shoulders and elbows, providing superior impact protection.