Thursday, May 29, 2025
Giving money away is good.
The Reserve Bank of India's (RBI) monthly bulletin released in May said that "The global growth continues to face headwinds with persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment weighing on the outlook. Despite this, the Indian economy is exhibiting resilience." MC. "India is better equipped than many emerging markets to withstand the effects of US tariffs and global trade disruptions, thanks to strong domestic growth drivers and a low reliance on goods exports, a Moody's Ratings report highlighted." ET. India's merchandise exports in FY 2024-25 were $437.42, imports were $720.24 billion, and so the merchandise trade deficit in FY 2024-25 was $282.83 billion. pib.gov.in. "India recorded a trade deficit of $99.2 billion with China in 2024/25 fiscal year that ended in March,..driven by a surge in imports of electronics goods and consumer durables. Reuters. We are giving our money away to other nations but, according to Moody's, that makes India "better equipped". It is like saying a man who is starving is healthier because his cholesterol is low. There was considerable criticism in 2018 when the base year for calculating GDP was changed to 2011-12 from 2004-05 as it cut the rate of growth of GDP during the previous Congress-led UPA government to 6.7% from over 7% and increased the growth rate under the present government to 7.4%, wrote Shwweta Punj. Net foreign direct investment (FDI) fell by 96% last year. Because of "A 16% rise in repatriation and disinvestment by foreign investors in existing companies to $51.5 billion and a 75% jump in outward FDI by Indian companies to $29 billion." "Foreign investors in India companies were showing a marked preference for ploughing back their gains from here to reinvest in other markets elsewhere." The Print. "The Indian government is taking multiple steps to maintain strong FDI inflows, including combing through regulations at both the central and state levels to make it easier for companies to invest, tailoring investment packages and making pitches to global corporations." ET. One source of foreign exchange is tourism which is unaffected by tariffs. In 2023, India received 18.89 international tourists but a lot of them were non-resident Indians (NRI), and from Bangladesh, coming for medical treatment. "In 2024, 9.66 million foreign tourists (excluding NRIs) arrived, provisional data from the government shows," wrote Varuni Kohli. Vietnam received 17.5 million international tourists in 2024 and aims to attract 23 million in 2025. TOI. Problem is that tourists can't be assured of returning home because a heavy shower causes severe traffic jams and cancellation of flights. Earlier this month, Gurgaon, Delhi Airport and Minto Road were inundated. Mint. Better drainage would help citizens and attract tourists. Or else, be happy with deficits. Better than tariffs.
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