RBI in its December policy meeting upgraded India’s GDP forecast and expects economy to shrink 7.5% this fiscal vs earlier forecast of 9.5% contraction as the economy is recuperating faster than anticipated. Further, even the IMF upgraded its forecast for GDP growth in FY22 (8.8% growth earlier to 11.5% growth) making it the only key nation to record a double-digit growth and reclaim the status of world’s fastest growing major economy.
Additionally, RBI expects growth to be in positive trajectory for Oct-Dec 2020 period and predicts a V-shaped recovery in FY21 driven by rollout of vaccine. Also, since mid-September, India has done well to flatten the curve of Covid-19 cases. The number of active cases had fallen to 1.5 lakh from a peak of 10 lakh cases in September.
FY21 is half done and the macro data available till now shows the hits to the economy because of the coronavirus pandemic. However, there are signs of revival. After the country’s economy contracted by a record 23.9% in April-June quarter, contraction for Q2’21 is expected to be around 8.6% as projected by RBI.
However, recent data suggests brightening prospects for October and if this upturn sustains, the Indian economy may return to growth in October-December quarter, thereby making a case for GDP upgrades soon.
Global Stock Markets
Despite the pandemic, the global stock markets (especially the US market) continue to be on steroids driven mainly by excess liquidity, positive sentiment post Joe Biden’s victory and also recent announcement by Pfizer and Moderna on positive vaccine update.
week, Lok Sabha passed three bills to reform and liberalize the production,
trade, and pricing of agriculture produce in the country. These are heavy
pieces of legislature but let’s under what they are in nutshell –
Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 – Farmers are now free to sell their produce outside the regulated Mandi (APMC). The bill gives freedom of choice to farmers in sale and purchase of agri-produce.
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 – The bill provides a framework for farmers to enter supply contract with larger buyers. The target is to provide farmers with remunerative prices for their produce in fair and transparent manner.
Essential Commodities (Amendment) Bill 2020 – The bill allows large business consumers to maintain stock of agriculture commodities (list of commodities finalised given by the law).
Vishal ShahNew agriculture Bill passed in Both the houses