The Signal (weekly highlights)

1. India sees foreign investment outflows of USD 3 billion in June 2022

India witnessed net foreign investment outflows of USD 3 billion in June 2022, as against to net inflows of USD 709 million in the preceding month. Net inflows of foreign direct investment (FDI) inched down to USD 4.7 billion from USD 5.6 billion in May 2022. Foreign portfolio investments (FPI) continued to see outflows. The outflows at USD 6.7 billion in June 2022 were higher than the outflows of USD 4.2 billion in May 2022.

During April-June 2022, net foreign investment inflows amounted to USD 1.5 billion, with net FDI inflows of USD 13.6 billion and net FPI outflows of USD 15.1 billion.    

2. India likely to become net importer of wheat in 2022-23

India is likely to head towards becoming a net importer of wheat in 2022-23 due to climate change that affected food production and the pandemic triggered scheme of free distribution of wheat for over a year to 800 million Indians. Reportedly, the buffer stock of wheat reached a 14-year low of 28.5 million tonnes as on 1 July 2022, only one million tonne higher than buffer norms. This is because around seven million tonnes of wheat was exported during 2021-22 and over three million tonnes was exported in the first quarter of the year 2022-23.

After one-and-a-half decades, India may be heading to become a net importer of wheat this fiscal. This can be attributed to climate change taking a heavy toll on food production across the world and the pandemic triggered scheme of free distribution of wheat for over a year to 80 crore Indian.

3. Economists estimate 14.5 to 16% GDP growth for Q1FY23

Economists from banks and rating agencies surveyed by Business Standard opine that India’s real GDP must have grown year-on-year in the range of 14.5 to 16 per cent in the first quarter of 2022-23. This is lower than the monetary policy committee’s projection of 16.2 per cent for the June 2022 quarter. According to economists, despite multiple headwinds on the external as well as domestic fronts, the economy is expected to have performed well during the June 2022 quarter, led by pent-up demand, especially in the services sector. Bank of Baroda has projected a real GDP growth of 14.5-15 per cent in the first quarter of 2022-23, while PwC India expect more than 15 per cent GDP growth. QuantEco has forecast a 15 per cent GDP growth in the June 2022 quarter. Only, CareEdge has estimated GDP growth much higher at 17.8 per cent for the first quarter.

4. DoT commences process to sell additional 5,500 MHz of 5G spectrum

The Department of Telecommunications (DoT) has initiated the process to unlock and sell an additional 5,500 megahertz (MHz) of 5G spectrum amounting to Rs.350 billion. Reportedly, the DoT has set up an internal committee to plan out a strategy to incorporate 37-42.5 gigahertz (GHz) as international mobile telecommunications (IMT) bands, which will enable telecom companies to use the spectrum.

Unlock and sell an additional 5,500 MHz of 5G spectrum, worth over Rs. 35,000 crore. This comes close on the heels of the government netting a record Rs. 1.5 Lakh crore from the recently concluded auctions.

5. India to become 2nd largest economy by 2031: Michael Patra

Reserve Bank of India (RBI) deputy governor Michael Debabrata Patra is of the view that India can become the second largest economy in the world by 2031 if it grows at a rate of 11 per cent over the next ten years. He further stated that even if India does not sustain this growth rate and slows down to four to five per cent during 2040-50, it would become the largest economy in the world after China by 2060. With a view to reach the milestone, Patra has suggested to focus on four drivers of growth including demographic dividend, manufacturing, exports and internationalisation of the rupee.

Demographics, manufacturing, exports and internationalisation are the four engines that can power India to achieve escape velocity from the emerging economy orbit and take off towards becoming an economic superpower, according to MD Patra, Deputy Governor, Reserve Bank of India (RBI).