The Signal: The Week Highlights

1. Moody’s Assigns India A New Mood

Moody’s revises India’s growth projection to 13.7% for FY22; expects contraction of 7% this fiscal. The revised numbers came on the back of normalization of activity and growing confidence in the market with the rollout of Covid-19 vaccines

The very large rebound incorporates the view that recovery in market activity will continue

In making Co-vid becoming Go-vid, India assigns packages and policies with direct and indirect benefits to drive key economic indicators in the present and near future. Playing to its strengths in demography, ‘local maker – global seller’ approach and looser spending budget will help India contain the contaminator and expedite the adoption of New Normal.

2. PLI Potential Draws From Ocean 11

In 7 years’ time, India can look to augur higher GVA figures, courtesy of business-friendly norms in 11 key identified manufacturing sectors. Industry policy should oomph export growth, import localization, domestic demand, and contract manufacturing to source healthy and wealthy growth. 

Finding new home in India, companies with market-cap bigger than country have situated its producers where its consumers are. The cash-rich entities continue to be cash-hungry, being interest-invoked by India’s make-&-take plans. The Make Local – Sell Global policy is here and alive.

3. FDI Fervor Is Here To Stay

There is a growing interest among overseas investors about the country amid the government’s continuing reform measures to further improve the business climate. Easing compliance will be a priority area to draw fresh overseas investments.

FDI recorded significant jump irrespective of global slowdown. Easing compliance and relaxed norms have attracted investors. The key sectors attracted investors are hardware, telecom, trading, construction, auto, chemical and pharmaceuticals. The trend is expected to continue with more development on ease of doing business.

4. Covid Can Cause Cheers Or Confusion

Vaccine efficacy and vaccination drive will be key in printing market trajectory in immediate times. The current recovery can be attributed to 3 factors– robust flows from foreign portfolio investors (FPI), fundamentals and sentiments. A crack in vaccine strategy can erode any 1/3 influencers.

Inflation and corporate earnings are going to be directly determined by vitality in vaccine distributions. Surge in the virus can push interest rates and valuations as central banks around the globe will look to cut liquidity supply.

5. Govt Divestment Is Nation’s Best Investment

New enterprise policy envisages strategic sectors to have upper-cap of 4 PSUs, with rest being rationalized via mergers, amalgamations and privatization. Emphasizing on domestic production, globally competitive costs and improving R&D, the paradigm framework calls for collaborative efforts with private sector.

Harmony between govt. policies and private practices is a winning combination for India to hold induce competences on the national and international front. In idoling Big Tech / Pharma of the west, India recognizes the accrued intelligence in collective capital and efficiencies of scale.