Latest news with #AnubhutiSahay
Time of India
5 days ago
- Business
- Time of India
Banking system flush with funds, consumers yet to make a splash
Mumbai: Banking system funds in liquid demand deposits-often seen as a proxy for cash-more than doubled to ₹3.79 lakh crore at the end of the June quarter, indicating significant liquidity in both the lending mechanism and the real economy. Similarly, currency with the public surged to ₹91,000 crore from ₹31,000 crore, the latest Reserve Bank of India (RBI) data showed. Explore courses from Top Institutes in Please select course: Select a Course Category MBA Operations Management Data Science Public Policy Management Product Management healthcare Design Thinking others Data Analytics CXO Data Science Cybersecurity Degree Digital Marketing Healthcare PGDM Others Technology Finance Artificial Intelligence Project Management Leadership MCA Skills you'll gain: Analytical Skills Financial Literacy Leadership and Management Skills Strategic Thinking Duration: 24 Months Vellore Institute of Technology VIT Online MBA Starts on Aug 14, 2024 Get Details Skills you'll gain: Financial Management Team Leadership & Collaboration Financial Reporting & Analysis Advocacy Strategies for Leadership Duration: 18 Months UMass Global Master of Business Administration (MBA) Starts on May 13, 2024 Get Details This rise reflects the impact of policy measures such as liquidity easing by the central bank, a pickup in rural activity that is largely cash-driven, and possibly higher disposable incomes due to tax sops. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top 15 Most Beautiful Women in the World Undo "The rise in currency leakage was seen since Q4FY'25 onward, which coincided with a rise in rural consumption," said Gaura Sengupta, chief economist, IDFC First Bank . "The pickup in deposits reflects substantial liquidity infusion by the Reserve Bank via Open Market Operations-OMO purchases. Banking system liquidity has turned positive from April 2025 onwards." Live Events The government raised the Income Tax eligibility limit to ₹12 lakh per annum for FY '25-26 from ₹7 Lakh per annum earlier, releasing more than ₹1 lakh crore at a system level. An interest rate cut also makes the cost of money cheaper. The RBI has cumulatively lowered the benchmark repo rates by 100 bps since February 2025. "Disposable income, especially with urban consumers, is likely to increase by 0.6% of GDP on 100 bps interest rate cut and income tax cut" said Anubhuti Sahay, head, India Economic Research, Standard Chartered Bank." However, this is unlikely to translate fully into higher spending as households are likely to deleverage. Household saving at 18% is at a historical bottom and we usually observe rebuilding of savings at such levels." "The significant increase in currency in circulation points to a strong recovery in rural economic activity" said Dilip Modi, founder and CEO, Spice Money. "This growth is fueled by multiple factors, including improved agricultural output, higher wages from employment schemes like MGNREGA, and government subsidies being delivered directly to Jan Dhan accounts." Additionally, the easing of inflation in essential goods has enhanced rural purchasing power, leading to greater cash flow and consumption. While cash is still widely used in rural India, digital payments like UPI are becoming more popular, Dilip Modi said.
Hans India
22-07-2025
- Business
- Hans India
India expected to clock 6.6 pc growth in FY26 despite uncertain global outlook
New Delhi: India is expected to expand close to its trend growth in FY26, supported by better consumption demand on recent monetary easing, income tax reductions, good monsoon rains, and the prospect of continued lower oil prices, according to a report on Tuesday. The Standard Chartered global outlook report expects India to clock steady GDP growth of 6.6 per cent in FY26 compared to 6.5 per cent in FY25. While strong macro fundamentals provide the cushion, the bank also flags that India is not immune to tariff risk and the outcome of trade talks with the US and the EU will be key to growth prospects. The confidence on India's growth outlook comes even as the bank has lowered its 2025 global growth forecast slightly to 3.1 per cent from the 3.2 per cent earlier amid still-elevated trade policy uncertainty. Anubhuti Sahay, Head of India Economic research, expects improvement in real purchasing power in FY26. However, she also said, 'While urban demand is expected to stay supported on countercyclical measures, urban households may partially use the benefits from lower rates and tax cuts to deleverage and boost savings.' 'A combined fiscal deficit sustainably below 7 per cent of GDP is an important criterion for a rating upgrade, as highlighted by S&P when it upgraded India's sovereign rating outlook to positive in 2024. FY26 will be the first year when combined fiscal deficit will be below 7 per cent of GDP. We also see a high probability of it staying below 7 per cent on a medium-term basis,' Sahay added. Overall, globally, the report sees growing downside risks to the US economy in H2 2025, after greater resilience than expected in H1. The inflationary impact of US tariffs is likely to constrain Fed monetary easing, with scope for one more 25bps rate cut in 2025, although there is a risk of a bigger 50 bps move at the September meeting. China's trend growth is likely to slow. While the worst of the US-China trade war appears to be over, with China's dominance of rare-earths production proving to be an effective bargaining tool, China's economy remains vulnerable to higher effective tariffs. Export growth, a key source of growth since COVID-19, could slow meaningfully by the end of 2025, the report added.
Economic Times
02-07-2025
- Business
- Economic Times
India's growth engine loses steam in June, may get back on track soon
Live Events Favourable weather conditions (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year the positive side, India's manufacturing activity strengthened and petrol consumption increased at a fast said this was a transitory moderation and growth is expected to gain momentum again, helped by a likely good monsoon, easing inflation and monetary relaxation by the RBI. The central bank has forecast growth at 6.7% in FY26. GST collections expanded at the slowest in the last 50 months at 6.2% in June, car sales dropped 6% in the month from a year ago and the UPI witnessed a slight decline in both transaction volume and value in June from May.'Around 6% growth in GST collections, coupled with less than 4% growth in advance tax collection for first quarter of FY26 does indicate softening of demand and cautious outlook,' said Pratik Jain, partner, Price Waterhouse & Co reported Tuesday that sales of air conditioners and refrigerators dropped sharply in the April-June quarter in the wake of milder-than-expected summer released on Monday showed India's industrial output growth slowed to a nine-month low of 1.2% in May, due to weak manufacturing growth along with contraction in mining and electricity sector companies announced new projects worth Rs 3.5 lakh crore in the quarter ended June, up from Rs 1.4 lakh crore in the same quarter last year, according to data from the Centre for Monitoring Indian Economy (CMIE). However, this was the slowest in four manufacturing activity rose to a 14-month high of 58.4 in June, driven by strong growth in output and new orders. The HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 57.6 in May and 58.3 in June UPI platform processed 18.40 billion transactions during the month, down from 18.68 billion in May. Transaction value dipped to ₹24.04 lakh crore from ₹25.14 lakh crore in May, according to data released by the National Payments Corporation of India (NPCI) on July consumption dipped 1.5% from a year earlier to 150.04 billion units in expect growth to pick up going ahead.'Despite a potential second-half slowdown, India is poised to grow close to trend, backed by favourable weather conditions, 0.6% GDP worth of policy support for urban consumers, and increased public capex,' said Anubhuti Sahay, senior economist, Standard Chartered the data indicates a mixed picture, the Indian economy is likely to have grown by 6.8% in the June quarter as the base is favourable, she said.
Time of India
02-07-2025
- Business
- Time of India
India's Growth Engine Loses Steam in June, may Get Back on Track Soon
The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year earlier. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year earlier. On the positive side, India's manufacturing activity strengthened and petrol consumption increased at a fast said this was a transitory moderation and growth is expected to gain momentum again, helped by a likely good monsoon, easing inflation and monetary relaxation by the RBI. The central bank has forecast growth at 6.7% in FY26. GST collections expanded at the slowest in the last 50 months at 6.2% in June, car sales dropped 6% in the month from a year ago and the UPI witnessed a slight decline in both transaction volume and value in June from May. 'Around 6% growth in GST collections, coupled with less than 4% growth in advance tax collection for first quarter of FY26 does indicate softening of demand and cautious outlook,' said Pratik Jain, partner, Price Waterhouse & Co reported Tuesday that sales of air conditioners and refrigerators dropped sharply in the April-June quarter in the wake of milder-than-expected summer temperatures. Data released on Monday showed India's industrial output growth slowed to a nine-month low of 1.2% in May, due to weak manufacturing growth along with contraction in mining and electricity sector companies announced new projects worth Rs 3.5 lakh crore in the quarter ended June, up from Rs 1.4 lakh crore in the same quarter last year, according to data from the Centre for Monitoring Indian Economy (CMIE). However, this was the slowest in four manufacturing activity rose to a 14-month high of 58.4 in June, driven by strong growth in output and new orders. The HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 57.6 in May and 58.3 in June UPI platform processed 18.40 billion transactions during the month, down from 18.68 billion in May. Transaction value dipped to ₹24.04 lakh crore from ₹25.14 lakh crore in May, according to data released by the National Payments Corporation of India (NPCI) on July consumption dipped 1.5% from a year earlier to 150.04 billion units in expect growth to pick up going ahead.'Despite a potential second-half slowdown, India is poised to grow close to trend, backed by favourable weather conditions, 0.6% GDP worth of policy support for urban consumers, and increased public capex,' said Anubhuti Sahay, senior economist, Standard Chartered the data indicates a mixed picture, the Indian economy is likely to have grown by 6.8% in the June quarter as the base is favourable, she said.
Time of India
01-06-2025
- Business
- Time of India
RBI expected to ease rates to spur demand amid growth optimism
Mumbai: The Reserve Bank of India is expected to cut interest rates for the third straight monetary policy meeting this week amid easing price pressures, according to economists. They are now keenly awaiting the central bank's commentary on inflation and growth to get an idea about how long it would continue with the easing cycle to fuel demand in an economy growing faster than expectations despite faltering consumption. All 12 financial institutions in an ET poll predicted a quarter-percentage-point cut in the policy repo rate, or the rate at which the central bank lends to banks, to 5.75% at the June 4-6 RBI Monetary Policy Committee meeting. But the views on growth and inflation were divergent. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Just apply "this" flying off the Japan's drugstore shelves... isn't it incredible? YUKINOUE雪之上 Learn More Undo "The GDP print reassures that growth is not falling apart, but the underlying demand - the household demand - has slowed down significantly and remains a sore point even though the headline number looks better," said Anubhuti Sahay, head of India economic research at Standard Chartered Bank. "From the MPC perspective, focus has to be on the weak consumption demand, private sector investment and external sector uncertainty. Growth is looking okay, but not as good as the headline number suggests." RBI, after falling behind other central banks in the rate-reduction cycle last year due to inflationary pressures, is now getting room to even go beyond the conventional quarter-point rate cut as inflation measured by the Consumer Price Index is below its target. The MPC is mandated to target inflation at 4% in a band of two percentage points on either side. Retail Inflation for April slowed to 3.16% from 3.34% in March, marking its lowest level since July 2019. On the other hand, GDP grew 6.5% in fiscal 2025, according to data released on Friday, exceeding the market expectations of 6.3%. While interest rate reduction is a given, economists would be looking at what RBI does to growth and inflation forecasts, and in how detail governor Sanjay Malhotra answers questions about these factors. Live Events The market doesn't expect growth forecasts to be downgraded, but the inflation forecasts are what would be more interesting to watch out for, said Abhishek Upadhyay, senior economist at ICICI Securities Primary Dealership. "But I do expect RBI to give lower inflation forecasts." The central bank's current predictions are for the economy to grow 6.5% in FY26 and inflation to average 4%. Since it issued the forecasts in April, the growth and inflation outlook got muddled as the global tariff war has gone directionless with rollbacks and additional tariffs leaving economists perplexed. Although this may have an impact on growth, the inflation outlook may have improved. India's inflation index, where food products have an overwhelming weight, may be under the target band as weather forecasters have predicted above normal rains this monsoon season, which may translate into higher agricultural output in the largely rainfed country, keeping a lid on prices. But given the global uncertainty over trade and tariffs, RBI could be cautious in giving out a rosy picture on inflation that may raise rate cut expectations. Its commentary could be to temper expectations. "If the governor chooses to underplay softer inflation over the next few months and talks about the need to look at a longer-term inflation trajectory, which is expected to be a little higher, then that would be a sign that RBI is not looking for deeper cuts," said Upadhyay. (Institutions Polled: Barclays, HDFC Bank , Bank of Baroda , Bank of America Securities, IDFC First Bank , Standard Chartered Bank, Ujjivan SFB , Kotak Mahindra Bank , ICICI Securities PD, CSB Bank , Union Bank of India , and MUFG Bank)
