The Signal: The Week Highlights

1. India Casts Its Net On Growth

The seemingly-sharp expansion will be led by the continued normalization in economic activities as the rollout of Covid-19 vaccines gathers traction and the low base. Growth laggards will be in contact-intensive sectors, discretionary consumption and private sector investment.

India reinstates its position as the apple of the (investor) eyes, by doctoring itself out of current cry-sis. Govt.’s marquee policies and packages, in support with RBI’s financially prudent intervention has India kick-start its economy in the higher gears. When peers are entering lock-downs, India looks to lock-in monies across borders, ready to become the fastest growing economy in the coming times.

2. Vaccination Amidst Virus – A Fractured Flute

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.

3. RBI Bankrolls The Government

The finance ministry has asked the Reserve Bank of India (RBI) to make every effort to secure a higher dividend for the government in the financial year 2021-22 (FY22), despite sliding interest rates globally, sources in the know said. It has also sought the RBI’s advice on gold monetization.

RBI has been the front-runner in helping India restrict economic shocks of Covid-19. RBI has advised against any change in the inflation goalposts. RBI Governor has assured Finance Minister that the Rs 12.05-trillion gross borrowing programme for FY22 will go through smoothly.

4. India Finds Favoritism When World Finds Fever

There is a growing interest among overseas investors about the country amid the government’s continuing reform measures to further improve the business climate. Defence production will be the areas for fresh overseas investments while easing compliance burden will be a priority area.

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.

5. The PLI Solution – In Facts & Figures

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.