The Signal (weekly highlights)

1. India’s goods and services exports to reach USD 750 bn in FY23

India’s goods and services exports are expected to be nearly USD 750 billion in 2022-23, which is up 11 per cent from a record USD 676 billion in the last financial year. Of the total, merchandise exports are likely to be around USD 470-480 billion, as against USD 420 billion in 2021-22.

The services sector is likely to contribute another USD 280 billion, he added. The trade deficit, which crossed USD 100 billion in the first four months of the current fiscal, is not going to cross the ‘discomfort level’ and is likely to moderate in the coming months because of softening of prices of oil and other commodities in the global market.                

2. India Inc’s ECBs plunge to USD 3.7 bn in Q1FY23

India Inc’s external commercial borrowings (ECBs) declined to a seven-quarter low of USD 3.7 billion during April-June 2022, as per the Reserve Bank of India (RBI). Prior to this, the lowest overseas fundraising in a single quarter was recorded during April-June 2020 when Covid-19 pandemic and the consequent nationwide lockdown brought the economic activity to a standstill.

India Inc had raised USD 3.5 billion during that quarter. The fall in resource mobilization through ECBs in the June 2022 quarter can be attributed to the monetary policy tightening by global central banks and rising interest rates, which have made the offshore funding less attractive for domestic borrowers.

3. States may receive Rs. 300 bn in GST compensation for June 2022 soon

The central government is likely to release about Rs.300 billion as goods and services tax (GST) compensation to states for June 2022 by September 2022, a government official told Business Standard. The official further stated that due to lack of sufficient funds in the designated cesspool for GST compensation, the central government will release funds from its own revenue stream.

The government may also release some arrears against claims pertaining to previous financial years if states submit reconciled figures endorsed by their auditor generals. In May 2022, Rs.869.1 billion or the entire amount of GST compensation payable to states upto that month was released.

4. Reuters poll predicts 15.2% GDP growth in Q1FY23

India’s real GDP growth in the June 2022 quarter is estimated at 15.2 per cent, according to a poll of 51 economists conducted by Reuters during 22-26 August 2022.

Economists attribute the expected double digit growth to a low base and a rebound in consumption as pandemic restrictions eased.

5. IT department collects Rs. 280 mn in taxes from ITR U filling

The Income Tax (IT) department has collected around Rs.280 million in taxes after about 100,000 returns were filed by taxpayers under the newly introduced return filing form called income tax return-updated (ITR-U).

The scheme was introduced by the Centre for the benefit of taxpayers so that they can comply with their tax responsibilities without getting into hassles of the law. The move aims to help correct any discrepancies or omissions that occurred while filing returns for 2019-20 and 2020-21 financial years.